The following computer output is for a model that includes a second order polyno

Question

The following computer output is for a model that includes a second order polynomial in the variable SqFt. For this model test the hypothesis that Beta2 (the coefficient for the SQFt squared term) = 0. What would you conclude as a result of this test?

Choose the best answer from the following:

i) The hypothesis that Beta2 = 0 is rejected because the p-value for testing this hypothesis = 0.000 < .05. This means that a second order polynomial is needed in the model and the relationship between Market and SqFt is a curved relationship. The regression equation is Market = 0.07 + 0.0597 sqFt - 0.000020 (SqFt)**2 Coef 0.073 Predictor Constant SqFt (SqFt) *2 -0.00001960 0.00000447 -4.39 0.000 SE Coef 4.998 0.01 0.988 0.059729 0.009614 6.21 0.000 S 3.47252 R-Sq -67.2% R-Sq (adj) -66.0% -

Explanation / Answer

Answer is The hypothesis that beta=0 is rejected because the p value for testing the hypotheis is less than 0.05. This means that a second order polynomial is needed in the model and the relationship between market and SqFt is a curved relationship.

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