One of the most common questions of prospective house buyers pertains to the cos
ID: 3222898 • Letter: O
Question
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X1) and the amount of insulation in inches (X2). Given below is EXCEL output of the regression model.
e) What is the 95% confidence interval for the expected change in heating costs as a result of a 1 degree Fahrenheit change in the daily minimum outside temperature?
f) Based on the interval found in (e), explain why temperature is significant at the 0.05 significance level.
Regression statistics R Square Adjusted R Square Regression Coefficients Intercept -2.7621 -15.9408 Significance F 00623 28452.6027 1673.6825 39395.6218 Standard Error Stat avalue Lower Upper 95% 90.7853 256.7522 639.8328 -1.5840 0.1316Explanation / Answer
(e) From the table, the 95% confidence interval is [-5.3721, -0.1520]
(f) The 95% confidence interval does not include 0. This means temperature is a significant variable at a level of significance of = 0.05.
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