Osteoporosis is a degenerative disease that primarily affects women over the age

Question

Osteoporosis is a degenerative disease that primarily affects women over the age of 60. A research analyst wants to forecast sales of StrongBones, a prescription drug for treating this debilitating disease. She uses the model Sales = 0 + 1Population + 2Income + , where Sales refers to the sales of StrongBones ($1,000,000s), Population is the number of women over the age of 60 (in millions), and Income is the average income of women over the age of 60 ($1,000s). She collects data on 38 cities across the United States and obtains the following relevant regression results: Coefficients Standard Error t Stat p-Value Intercept 10.35 4.02 2.57 0.0199 Population 8.47 2.71 3.12 0.0062 Income 7.62 6.63 1.15 0.2661 Interpret the coefficient of income. a. As the average income of women over the age of 60 increases by $1000, sales of StrongBones is predicted to increase by $8.47 million, holding population constant. b. As the average income of women over the age of 60 increases by $1000, sales of StrongBones is predicted to increase by $8.47 million. c. As the average income of women over the age of 60 increases by $1000, sales of StrongBones is predicted to increase by $7.62 million, holding population constant. d. As the average income of women over the age of 60 increases by $1000, sales of StrongBones is predicted to increase by $7.62 million.

Explanation / Answer

Given Regression output is

Y = 10.35 + 8.47 * population + 7.62 * income

Here slope of income is 7.62

Now interpretation of income variable is

d. As the average income of women over the age of 60 increases by $1000, sales of StrongBones is predicted to increase by $7.62 million.

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