3) (39pt) Consumer Research Inc. is an independent agency that conducts research

Question

3) (39pt) Consumer Research Inc. is an independent agency that conducts research on consumer attitudes and behaviors for a variety of firms. In one study, a client asked for an investigation of consumer characteristics to explain the annual amount that credit card users charge on their accounts. Data collected on 50 credit card holders on explanatory variables income (in thousands of dollars), household size and dependent variable credit card amount expressed in dollars are portrayed on scatter plots below a. (2pt)Comment on the relationship of each explanatory variable to Credit card amount. MODEL 1-run a regression using income as the only explanatory variable a. (2pt)Comment on the goodness of fit of Model 1 - Model Summary Model 1 Std. Error Adjustedof the Model R R SquareR Square Estimate a. Predictors: (Constant), IncomeinThousands

Explanation / Answer

For model 1

a) the r square value is 0.631 , this means the model is able to explain only 63.1% variation in the data

b) as the p value is 0.000 which is less than 0.05 , hence the model is statistically signficant in explaining the variation of the data

c) creditcard amount = 40.48*Income + 2204 - regression equation

d) when the value of income = 0 , the credit card amount is 2204 , which represents the intercept of the regression equation

e) This means that for every unit change in the value of income , the credit card amount increases by 40.48 units

Please note that we can answer only 4 subparts of a question at a time , as per the answering guidelines.

I have answered all for model 1

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