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27 views

Tutorial 8

Uploaded by

Robert Oo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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BQA1014 Quantitative Analysis Models for Business TRI 2 2022/2023

Tutorial 8: Multiple Linear Regression

1. Refer to the following ANOVA table

SOURCE DF SS MS F
Regression 5 60 12 1.714
Error 20 140 7
Total 25 200

(a) How large was the sample?


(b) How many independent variables are there?
(c) Compute the coefficient of multiple determination.

2. The following ANOVA summary table was obtained from a multiple model with
two independent variables

SOURCE DF SS MS F
Regression 2 60
Error 18 120
Total 20 180

(a) Determine the mean square that is due to regression and the mean square
that is due to error.
(b) Compute the F statistic.
(c) Determine whether there is a significant relationship between Y and the
two exploratory variables at the 0.05 level of significance.

3. A real estate builder wishes to determine how house size is influenced by family
income, family size, and education of the head of household. House size is
measured in hundreds of square feet, income is measured in thousands of dollars,
and education is measured in years. A partial computer output is shown below.

ANOVA
df SS MS F
Regression 3
Residual 36 1214.2264
Total 39 4820.0000

Coefficient Standard. Error t-Stat


Intercept -1.6335 5.8078 -0.2810
Family Income 0.4485 0.1137 3.9446
Family Size 4.2615 0.8062 5.2860
Education -0.6517 0.4319 -1.5090

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BQA1014 Quantitative Analysis Models for Business TRI 2 2022/2023

(a) State the multiple regression equation for the above information.
(b) Complete the ANOVA table given.
(c) Compute the R-Square and explain.
(d) Perform a F test at the 5% significance level to determine whether the
model is useful in predicting the house size.
(e) Test the regression coefficients individually. Would you consider omitting
any variables? If so, which one? Use the 0.05 significance level.

4. Human Capital Management Company ABC wishes to predict the annual salary
of employees to prepare the budget in the coming years. Data was collected from
40 employees to develop a regression model to predict the employee’s annual
salary using their years with the company (Years), their starting salary (Starting),
and their Gender (Male = 0, Female = 1). The partial computer results are shown
below:

ANOVA
df SS MS F
Regression 3 4334682510
Residual 36 4056901131
Total 39 8391583641

Coefficients Standard Error t Stat


Intercept 27946.57894 4832.438706 5.783121245
Years 1665.251558 425.0829092 3.917474737
Starting 0.266374185 0.12610443 2.112330112
Gender -3285.541043 5617.145392 -0.584912943

(a) State the multiple regression equation for the above information.
(b) Complete the ANOVA table given.
(c) Compute the R-Square and explain.
(d) Perform a F test at the 5% significance level to determine whether the
model is useful in predicting the annual salary.

(e) Test the regression coefficients individually. Would you consider omitting
any variables? If so, which one? Use the 0.05 significance level.

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BQA1014 Quantitative Analysis Models for Business TRI 2 2022/2023

5. The following is part of the computer generated results of a multiple regression


analysis involving annual salary (Y), years of experience (X 1), education (X2) and
sex (X3) for a telecommunications firm.

ANOVA
df SS MS F Significance F
Regression 3 105309901.3 35103300.42 6.923421787 0.008376182
Residual 10 50702241.6 5070224.16
Total 13 156012142.9

Coefficients Standard Error t Stat P-value Lower 95% Upper 95%


Intercept 45495.32938 2809.771399 16.19182592 1.67346E-08 39234.76858 51755.89017
Years of Experience (X1) 801.5711025 228.4684282 3.508454576 0.005646207 292.5117233 1310.630482
Education (X2) 1595.736538 560.6439792 2.846256443 0.017361158 346.5439113 2844.929165
Sex (X3) 382.5720808 1287.410877 0.297163934 0.772422528 -2485.958099 3251.102261

(a) What is the sample size?


(b) Compute the R – Square and explain.
(c) What is the multiple regression equation for estimating salary based on
experience, education and sex?
(d) Perform an F test at  = 0.05 to test whether there is linear relationship
between the annual salary and the three predictors of the technicians.

(e) Are all the independent variables in the model significant? Would you
consider omitting any variables that do not contribute to the regression
model? If so, which one? Use the 0.05 significance level.

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