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The document discusses a crime rate prediction model using regression analysis, highlighting the significant impact of poverty on crime rates while income is not statistically significant. It provides a predicted crime rate based on specific values of poverty and income, and compares multiple models to determine the best fit, concluding that Model 3 is preferred due to its lower standard error and higher adjusted R². Additionally, it touches on customer churn analysis using logistic regression, explaining the influence of age and income on churn likelihood, and outlines the assumptions underlying linear regression models.

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3 views

ba notes

The document discusses a crime rate prediction model using regression analysis, highlighting the significant impact of poverty on crime rates while income is not statistically significant. It provides a predicted crime rate based on specific values of poverty and income, and compares multiple models to determine the best fit, concluding that Model 3 is preferred due to its lower standard error and higher adjusted R². Additionally, it touches on customer churn analysis using logistic regression, explaining the influence of age and income on churn likelihood, and outlines the assumptions underlying linear regression models.

Uploaded by

dhuriya.divyanshi3
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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You said:
please solve this for me

ChatGPT said:

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Solution:

(A) Express the model in the form of an equation and discuss findings and interpretations.

The regression equation is written as:


Crime Rate = Intercept + (Coefficient of Poverty × Poverty) + (Coefficient of Income × Income)

From the given data:

 Intercept = −301.620−301.620

 Coefficient of Poverty = 53.16053.160


 Coefficient of Income = 4.9474.947

Thus, the model is:


Crime Rate = −301.620+53.160×Poverty+4.947×Income−301.620+53.160×Poverty+4.947×Income

Interpretation:

 Poverty: The coefficient 53.16053.160 is significant (P=0.000608<0.05P=0.000608<0.05),


indicating that a unit increase in poverty increases the crime rate by
approximately 53.16053.160.

 Income: The coefficient 4.9474.947 is not statistically significant


(P=0.552608>0.05P=0.552608>0.05), meaning income does not significantly impact the
crime rate.

 Model Fit: With R2=0.4591R2=0.4591, about 45.91% of the variation in the crime rate is
explained by poverty and income. The model is moderate in fit.

 Significance: The overall model is significant (P=8.503e−06P=8.503e−06), indicating a good


overall relationship between the predictors and the crime rate.

(B) Predict the crime rate if poverty is 4.9 and income is 56.445.

Using the regression equation:

Crime Rate=−301.620+53.160×4.9+4.947×56.445Crime Rate=−301.620+53.160×4.9+4.947×56.445

Substitute the values:

Crime Rate=−301.620+(53.160×4.9)+(4.947×56.445)Crime Rate=−301.620+(53.160×4.9)+(4.947×56.4


45)Crime Rate=−301.620+260.484+279.247Crime Rate=−301.620+260.484+279.247Crime Rate=238.
111Crime Rate=238.111

Predicted Crime Rate = 238.111

(C) Based on the results below, which model is the most preferred and why?

Comparison of models:

Metric Model 1 Model 2 Model 3 Model 4

Standard Error 3271.441 2751.807 2645.831 2648.800

R² 0.191 0.316 0.343 0.345

Adjusted R² 0.240 0.356 0.379 0.375

Preferred Model: Model 3 is most preferred because:


1. It has the lowest standard error of the estimate (2645.831), indicating better predictive
accuracy.

2. It has the highest Adjusted R2R2 (0.379), showing the best explanatory power of the model
while considering model complexity.

Model 4 has a slightly higher R2R2 but a slightly worse Adjusted R2R2, suggesting overfitting
compared to Model 3.

You said:

ChatGPT said:

ChatGPT

Solution:

(A) Interpret the influence of each parameter on customer churning.

The logistic regression model is:

Customer Churn=1.75−0.25×Age+0.005×IncomeCustomer Churn=1.75−0.25×Age+0.005×Income

Assume both parameters (AgeAge and IncomeIncome) are significant, and the model is a good fit.

1. Intercept (1.751.75):
The intercept represents the baseline log-odds of customer churn when
both AgeAge and IncomeIncome are 0. This is primarily for theoretical purposes, as it often has no
real-world interpretability without context.

2. Age (−0.25−0.25):

 The coefficient of AgeAge is negative, meaning an increase in age reduces the likelihood of
customer churn.
 For every 1-year increase in age, the log-odds of churning decrease by 0.250.25.

 Older customers are less likely to churn compared to younger customers.

3. Income (0.0050.005):

 The coefficient of IncomeIncome is positive, meaning an increase in income increases the


likelihood of customer churn.

 For every unit increase in income (assuming in thousands or another specified scale), the log-
odds of churning increase by 0.0050.005.

 Customers with higher income are slightly more likely to churn compared to those with
lower income.

(B) Explain the model assumptions in linear regression.

Linear regression models are based on the following assumptions:

1. Linearity:

 The relationship between the independent and dependent variables is linear.

2. Independence:

 The observations (data points) are independent of each other.

3. Homoscedasticity:

 The variance of the errors (residuals) is constant across all levels of the independent
variables.

4. Normality of Errors:

 The residuals (errors) are normally distributed.

5. No Multicollinearity:

 The independent variables are not highly correlated with each other.

These assumptions ensure that the linear regression model produces reliable, unbiased, and valid
predictions.

You said:

MODEL selection : AIC or BIC

ChatGPT said:

ChatGPT
When selecting a model, AIC (Akaike Information Criterion) and BIC (Bayesian Information
Criterion) are commonly used metrics. The choice between AIC and BIC depends on the specific
context and goals of

ChatGPT can make mistakes. Check important info.

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