Suppose that a researcher, by using a sample of transactions of residential houses, wants to estimate how the price of the houses is affected by the absence of anelevator in the building. To this end, he regresses the price of the house in thousands euro, price, on the dummy no_elevator indicating the absence of the elevator(dummy equal to 1) or the presence (dummy equal to 0):price; = a0 +a1 no_elevator; + u;The OLS estimates are (standard errors in round brackets below the corresponding coefficient):R2 = 0.036price; = 199.937 - 73.068 no_elevator;(10.735)(5.482)The poor fit of the model suggests the researcher to insert an additional regressor, namely the surface of the houses, area, in square meters. Supposing that area andno_elevator are negatively correlated, what do you think will happen to the previously estimated coefficient of no_elevator?O (a) We cannot say given the so poor fit of the modelO (b) It will be larger than -73.068 (i.e. -30)O (c) It will be smaller than -73.068 (i.e. -110)O (d) It will be equal to -73.068

Given information: The regression model for predicting price using no-elevator is given.

Answered: Suppose that a researcher, by using a…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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A group of medical professionals is considering theconstruction of a private clinic. If the medical de-mand is high (i.e., there is a favorable market for theclinic), the physicians could realize a net profit of$100,000. If the market is not favorable, they couldlose $40,000. Of course, they don’t have to proceedat all, in which case there is no cost. In the absenceof any market data, the best the physicians can guessis that there is a 50–50 chance the clinic will be suc-cessful. Construct a decision tree to help analyze thisproblem. What should the medical professionals do?
A national study found that treating people appropriately forhigh blood pressure reduced their overall mortality by 20%.Treating people adequately for hypertension has been difficult because it is estimated that 50% of hypertensives donot know they have high blood pressure, 50% of those whodo know are inadequately treated by their physicians, and50% who are appropriately treated fail to follow this treatment by taking the right number of pills. 2 If the preceding 50% rates were each reduced to40% by a massive education program, then what effectwould this change have on the overall mortality rate amongtrue hypertensives; that is, would the mortality rate decreaseand, if so, what percentage of deaths among hypertensivescould be prevented by the education program?
The permanent residence of adults aged 18-25 in the U.S. was examined in a survey from the year 2000. The survey revealed that 27% of these adults lived alone, 32% lived with a roommate(s), and 41% lived with their parents/guardians. In 2008, during an economic recession in the country, another such survey of 1600 people revealed that 398 lived alone, 488 lived with a roommate(s), and 714 lived with their parents. Is there a significant difference in where young adults lived in 2000 versus 2008 and state the p-value? Test with a Goodness of Fit test at α=0.05. Alone Roommates Parents/Guardians Observed Counts 398 488 714 Expected Counts 432 512 656
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To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer's adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow. Adjusted Gross Income($1,000s) Itemized Deductions($1,000s) 22 9.6 27 9.6 32 10.1 48 11.1 65 11.5 85 19.7 120 23.5 (a) Develop a scatter diagram for these data with adjusted gross income as the independent variable. A scatter diagram has 7 points plotted on it. The horizontal axis ranges from 0 to 140 and is labeled: Adjusted Gross Income ($1,000s). The vertical axis ranges from 0 to 30 and is labeled: Itemized Deductions ($1,000s). The points are…
To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer's adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow. Adjusted Gross Income($1,000s) Itemized Deductions($1,000s) 22 9.6 27 9.6 32 10.1 48 11.1 65 13.5 85 19.7 120 27.5 (a) Develop a scatter diagram for these data with adjusted gross income as the independent variable. (b) Use the least squares method to develop the estimated regression equation that can be used to predict itemized deductions (in $1,000s) given the adjusted gross income (in $1,000s). (Round your numerical values to three decimal…
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A soda company sells one of its soft drinks in 12 ounce cans. In order to ensure that every can has at least 12 ounces in it, the machines in the factory are set to fill each can with an average of 12.1 ounces of soda. Every week, a quality-control technician tests 10 cans to make sure that the average amount of soda in the cans is still 12.1 ounces. If the conclusion of the test is that the number of ounces of soda in the cans is different from 12.1, the technician will declare that the process is out of control, and the machine will be stopped and calibrated. From previous tests, the technician found that the standard deviation of the number of ounces of soda in the cans is approximately 0.01. The number of ounces of soda in the 10 cans that were tested this week is given below. Assume that the standard deviation from the technician's previous tests is the population standard deviation. Use a TI-83, TI-83 Plus, or TI-84 calculator to test whether filling process is out of control and…
A marketing research group conducting a telephone survey must contact at least 150 wives and 120 husbands. It costs P100 to make a daytime call and (because of higher labor costs) P150 to make an evening call. On average, daytime calls reach wives 30% of the time, husbands 10% of the time, and neither of these 60% of the time, whereas evening calls reach wives 30% of the time, husbands 30% of the time, and neither of these 40% of the time. Staffing considerations mean that daytime calls must be less than or equal to half of the total calls made. How many should be interviewed at each period to minimize the cost of completing the survey? fomulate the LP Model; identify the decision variables used in the model; and determine the optimal solution using graphical method.
To the Internal Revenue Service (IRS), the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on Adjusted Gross Income (AGI) and the Reasonable Amount of Itemized Deductions (RAID) are as follows: AGI : 22, 27, 32, 48, 65, 85, 120 RAID : 9.6, 9.6, 10.1, 11.1, 13.5, 17.7, 25.5 The correct interpretation of the meaning of each of the coefficients in the linear model is: a. When AGI is zero, the RAID is $4680 in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every one thousand dollar of the AGI, the RAID increases by $161 in this linear model.…
To the Internal Revenue Service (IRS), the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on Adjusted Gross Income (AGI) and the Reasonable Amount of Itemized Deductions (RAID) are as follows: AGI : 22, 27, 32, 48, 65, 85, 120 RAID : 9.6, 9.6, 10.1, 11.1, 13.5, 17.7, 25.5 Examine the attached printout and answer the following questions. The correct interpretation of the meaning of each of the coefficients in the linear model is: a. When AGI is zero, the RAID is $4680 in this linear model. Since x = 0 is not included in the sample values of the independent variable, this interpretation cannot be a meaningful one. For every one…

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