Question

An aircraft company wanted to predict the number of worker-hours necessary to finish the design of a new plane. Relevant explanatory variables were thought to be the plane's top speed, its weight, and the number of parts it had in common with other models built by the company. A sample of 27 of the company's planes was taken, and the following model was estimated: $$ y=\beta_0+\beta_1 x_1+\beta_2 x_2+\beta_3 x_3+\varepsilon $$ where $y=$ design effort, in millions of worker-hours $x_1=$ plane's top speed, in miles per hour $x_2=$ plane's weight, in tons $x_3=$ percentage of parts in common with other models The estimated regression coefficients were as follows: $$ b_1=0.661 \quad b_2=0.065 \quad b_3=-0.018 $$ The total sum of squares and regression sum of squares were found to be as follows: $$ S S T=3.881 \text { and } S S R=3.549 $$ a. Compute and interpret the coefficient of determination. b. Compute the error sum of squares. c. Compute the adjusted coefficient of determination. d. Compute and interpret the coefficient of multiple correlation.

   An aircraft company wanted to predict the number of worker-hours necessary to finish the design of a new plane. Relevant explanatory variables were thought to be the plane's top speed, its weight, and the number of parts it had in common with other models built by the company. A sample of 27 of the company's planes was taken, and the following model was estimated:
$$
y=\beta_0+\beta_1 x_1+\beta_2 x_2+\beta_3 x_3+\varepsilon
$$
where
$y=$ design effort, in millions of worker-hours
$x_1=$ plane's top speed, in miles per hour
$x_2=$ plane's weight, in tons
$x_3=$ percentage of parts in common with other models
The estimated regression coefficients were as follows:
$$
b_1=0.661 \quad b_2=0.065 \quad b_3=-0.018
$$
The total sum of squares and regression sum of squares were found to be as follows:
$$
S S T=3.881 \text { and } S S R=3.549
$$
a. Compute and interpret the coefficient of determination.
b. Compute the error sum of squares.
c. Compute the adjusted coefficient of determination.
d. Compute and interpret the coefficient of multiple correlation.
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Statistics for Business and Economics: Global Edition
Statistics for Business and Economics: Global Edition
Newbold P., Carlson… 8th Edition
Chapter 12, Problem 19 ↓

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The coefficient of determination, \( R^2 \), is calculated using the formula: \[ R^2 = \frac{SSR}{SST} \] where \( SSR \) is the regression sum of squares and \( SST \) is the total sum of squares. Plugging in the given values: \[ R^2 = \frac{3.549}{3.881} \approx  Show more…

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An aircraft company wanted to predict the number of worker-hours necessary to finish the design of a new plane. Relevant explanatory variables were thought to be the plane's top speed, its weight, and the number of parts it had in common with other models built by the company. A sample of 27 of the company's planes was taken, and the following model was estimated: $$ y=\beta_0+\beta_1 x_1+\beta_2 x_2+\beta_3 x_3+\varepsilon $$ where $y=$ design effort, in millions of worker-hours $x_1=$ plane's top speed, in miles per hour $x_2=$ plane's weight, in tons $x_3=$ percentage of parts in common with other models The estimated regression coefficients were as follows: $$ b_1=0.661 \quad b_2=0.065 \quad b_3=-0.018 $$ The total sum of squares and regression sum of squares were found to be as follows: $$ S S T=3.881 \text { and } S S R=3.549 $$ a. Compute and interpret the coefficient of determination. b. Compute the error sum of squares. c. Compute the adjusted coefficient of determination. d. Compute and interpret the coefficient of multiple correlation.
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Key Concepts

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Multiple Linear Regression
Multiple linear regression is a statistical method used to model the relationship between one dependent variable and two or more independent variables. It estimates how changes in each predictor affect the outcome, assuming a linear relationship between the predictors and the response variable.
Sum of Squares (SST, SSR, SSE)
The sum of squares in regression analysis quantifies the variability in the response variable. SST (total sum of squares) measures the total variability in the data, SSR (regression sum of squares) measures the variability explained by the model, and SSE (error sum of squares) represents the unexplained variability or the residual error after fitting the model.
Coefficient of Determination (R²)
The coefficient of determination, R², is a measure that indicates the proportion of the variance in the dependent variable that is predictable from the independent variables. It is calculated as the ratio SSR/SST and ranges from 0 to 1, where higher values indicate a better fit of the model to the data.
Adjusted Coefficient of Determination
The adjusted coefficient of determination adjusts the R² value for the number of predictors in the model relative to the number of data points. This metric accounts for potential overfitting by penalizing the addition of non-informative predictors, providing a more accurate representation of model performance when multiple explanatory variables are involved.
Coefficient of Multiple Correlation
The coefficient of multiple correlation, denoted as R, is the square root of the R² value and represents the correlation between the observed outcome values and the values predicted by the model. It provides an overall measure of how well the independent variables collectively relate to the dependent variable.

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An aircraft company wanted to predict the number of worker-hours necessary to finish the design of a new plane. Relevant explanatory variables were thought to be the plane's top speed, its weight, and the number of parts it had in common with other models built by the company. A sample of 30 of the company's planes was taken, and the following model was estimated: y = b0 + b1x1 + b2x2 + b3x3 + e where, y = design effort, in millions of worker-hours x1 = plane's top speed, in miles per hour x2 = plane's weight, in tons x3 = percentage of parts in common with other models b1, b2, b3 = known estimated values The total sum of squares and regression sum of squares were found to be as follows: SST = 3.928 and SSR = 3.276 (a) Compute and interpret the coefficient of determination. (b) Compute the error sum of squares. (c) Compute the adjusted coefficient of determination. (d) Compute and interpret the coefficient of multiple correlation.

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An aircraft company wanted to predict the number of worker-hours necessary to finish the design of a new plane. Relevant explanatory variables were thought to be the plane's top speed, its weight, and the number of parts it had in common with other models built by the company. A sample of 27 of the company's planes was taken, and the following model was estimated: y = b0 + b1x1 + b2x2 + b3x3 + e, where y = design effort, in millions of worker-hours, x1 = plane's top speed, in miles per hour, x2 = plane's weight, in tons, x3 = percentage of parts in common with other models. The estimated regression coefficients were as follows: b1 = 0.661, b2 = 0.065, b3 = -0.018. The estimated standard errors were as follows: sb1 = 0.099, sb2 = 0.032, sb3 = 0.0023. a. Find 90% and 95% confidence intervals for b1. b. Find 95% and 99% confidence intervals for b2. c. Test against a two-sided alternative the null hypothesis that, all else being equal, the plane's weight has no linear influence on its design effort. d. The error sum of squares for this regression was 0.332. Using the same data, a simple linear regression of design effort on the percentage of common parts was fitted, yielding an error sum of squares of 3.311. Test, at the 1% level, the null hypothesis that, taken together, the variables top speed and weight contribute nothing in a linear sense to explaining the changes in the variable design effort, given that the variable percentage of common parts is also used as an explanatory variable.

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