A study was done on 50 households to determine if income and the number of peopl
ID: 1095251 • Letter: A
Question
A study was done on 50 households to determine if income and the number of people living together played a role in credit card spending. Below is the regression output, with Income being annual household income in thousands of dollars, Household Size being the number of people living together in the household, and Amount Charged being the annual credit card purchases per household.
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.908603921
R Square
0.825561086
Adjusted R Square
0.818138154
Standard Error
398.0910071
Observations
50
ANOVA
df
SS
MS
F
Significance F
Regression
2
35250755.67
17625377.84
111.2176
1.50876E-18
Residual
47
7448393.148
158476.4499
Total
49
42699148.82
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
1304.904779
197.6548431
6.601936785
3.29E-08
907.2745236
1702.535
Income
($1000s)
33.13300915
3.967905842
8.350250854
7.68E-11
25.15061221
41.115406
Household
Size
356.2959015
33.20089044
10.73151644
3.12E-14
289.5043251
423.08748
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.908603921
R Square
0.825561086
Adjusted R Square
0.818138154
Standard Error
398.0910071
Observations
50
ANOVA
df
SS
MS
F
Significance F
Regression
2
35250755.67
17625377.84
111.2176
1.50876E-18
Residual
47
7448393.148
158476.4499
Total
49
42699148.82
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Intercept
1304.904779
197.6548431
6.601936785
3.29E-08
907.2745236
1702.535
Income
($1000s)
33.13300915
3.967905842
8.350250854
7.68E-11
25.15061221
41.115406
Household
Size
356.2959015
33.20089044
10.73151644
3.12E-14
289.5043251
423.08748
Explanation / Answer
In this case, Credit card spending = 1304.90 + 33.13Incmoe + 356.29*Household size
When household size and income = 0, then credit card spending = 1304.90
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