Airfare prices: Suppose that we want to examine the relationship between distanc

Question

Airfare prices: Suppose that we want to examine the relationship between distance (in miles) and the cost of round-trip airfare from LAX (Los Angeles International Airport). We collect data from a travel search engine. The linear regression equation is

Predicted round-trip airfare = 146.2 + 0.1442 (distance)

The standard error of the regression se is $117. Which of the following is an appropriate interpretation of se?

a.
~feedback: The se value is a measurement of typical error in our predictions using the linear regression model. Our predictions using this linear regression model may be an overestimate or underestimate of round-trip airfare.
b.
~feedback: The se value is a measurement of typical error in our predictions using the linear regression model.
c.
~feedback: The se value is a measurement of typical error in our predictions using the linear regression model. Our predictions may be an overestimate or underestimate of round-trip airfare.
d. On average, we estimate that our predictions using this linear regression model will be off by approximately $117.
e.
~feedback: The se value is a measurement of typical error, not the actual error, in our predictions using the linear regression model.
f. On average, we estimate that our predictions using this linear regression model will be off by approximately ±$117.
g. The error for any prediction using this linear regression model will be approximately $117.
h. The typical error between the predicted round-trip airfare and the actual round-trip airfare using this linear regression model will be approximately $117

Explanation / Answer

Correct answer: (h) The typical error between the predicted round-trip airfare and the actual round-trip airfare using this linear regression model will be approximately $117

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