Question

A professional hockey player is about to become a free-agent, meaning he can play for any team he wishes. Having taken Statistics 217 as a student at U of C, he knows how powerful statistics can be when making decisions when faced with uncertainty. He wishes to use the statistical skills acquired during his 'Stat 217' days to see if the value of his free-agency contract depends on the length of the contract. That is, can he express the total value of the contract as a linear function of the number of years it is good for? The model he proposes is ContractValue_i = eta_0 + eta_1 Length_i + e_i where Length_i - is the length, in years, of the contract awarded to a NHL player i after he became a free agent ContractValue_i - is total value of the contract awarded to a NHL player i, in millions of $. He looked at the free agent contracts of n = 40 NHL players, and assumes that the value of one contract does not dictate the value of another. He ran a regression in R getting the following output: Value of Contract (in $millions) Years on the Contract

          A professional hockey player is about to become a free-agent, meaning he can play for any team he wishes. Having taken Statistics 217 as a student at U of C, he knows how powerful statistics can be when making decisions when faced with uncertainty. He wishes to use the statistical skills acquired during his 'Stat 217' days to see if the value of his free-agency contract depends on the length of the contract. That is, can he express the total value of the contract as a linear function of the number of years it is good for? The model he proposes is ContractValue_i = eta_0 + eta_1 Length_i + e_i where Length_i - is the length, in years, of the contract awarded to a NHL player i after he became a free agent ContractValue_i - is total value of the contract awarded to a NHL player i, in millions of $. He looked at the free agent contracts of n = 40 NHL players, and assumes that the value of one contract does not dictate the value of another. He ran a regression in R getting the following output: Value of Contract (in $millions) Years on the Contract

A professional hockey player is about to become a free-agent, meaning he can play for any team he wishes. Having taken Statistics 217 as a student at U of C, he knows how powerful statistics can be when making decisions when faced with uncertainty. He wishes to use the statistical skills acquired during his 'Stat 217' days to see if the value of his free-agency contract depends on the length of the contract. That is, can he express the total value of the contract as a linear function of the number of years it is good for? The model he proposes is ContractValuei = eta0 + eta1 Lengthi + ei where Lengthi - is the length, in years, of the contract awarded to a NHL player i after he became a free agent ContractValuei - is total value of the contract awarded to a NHL player i, in millions of . He looked at the free agent contracts of n = 40 NHL players, and assumes that the value of one contract does not dictate the value of another. He ran a regression in R getting the following output: Value of Contract (inmillions) Years on the Contract

Added by Ryan H.

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