Assume you ran a multiple regression to gain a better understanding of the relat

Question

Assume you ran a multiple regression to gain a better understanding of the relationship between lumber sales, housing starts, and commercial construction. The regression uses lumber sales (in $100,000s) as the response variable with housing starts (in 1000s)(in 1,000s) and commercial construction (in 1000s)(in 1,000s) as the explanatory variables. The estimated model is Lumber Sales = 0 + 1Housing Starts + 2Commercial Constructions + . The following ANOVA table summarizes a portion of the regression results.

If Housing Starts were 17,000 and Commercial Construction was 3,200, the best estimate of Lumber Sales would be ________.

df SS MS F   Regression 2 180,770 90,385 103.3   Residual 45 39,375 875   Total 47 220,145 Coefficients Standard Error t-stat p-value   Intercept 5.37 1.71 3.14 0.003 Housing Starts 0.76 0.09 8.44 0 Commercial Construction 1.25 0.33 3.78 0.0005

Explanation / Answer

The best estimate of lumber sales would be

Lumber sales = 5.37+0.76*17+1.25*32 = 22.29

So, lumber sales would be $22290

Option A is Correct

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