The Cost Of Passenger Cruise

794 Words4 Pages
1. After running two different regression models using passenger cruise days and number of passengers to predict which variable better estimates total cost, the data (including a slightly higher adjusted r squared) suggests the number of passenger cruise days acts as a better predictor of total costs. The number of passenger cruise days is more economically plausible because it is more logical to allocate the costs based on the number of passenger cruise days rather than the number of passengers. More specifically, number of passengers does not fully explain the amount of total costs because of the varying duration of trips. For example, consider an instance where Carnival accommodates one thousand passengers on a four-day cruise and one thousand passengers on a seven-day cruise. Theoretically total costs would be the same when using number of passengers to explain total costs because each cruise accommodates the same number of passengers. On the other hand, when one considers the length of a cruise, total costs should be higher for longer cruises. Per the example above, a seven-day cruise will have higher costs than a four-day cruise because of the additional resources needed to accommodate passengers for a longer period of time. 2. In order to determine whether two independent variables better explain cost than a single regression (See #1), the group ran a two separate multiple regression. The first multiple regression was run with the number of passenger cruise days