(A)   Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and number of construction permits issued in its market area:     No. of Construction Sales Year Permits Issued (000) (1,000,000)       2003 6.50 10.30 2004 6.20 10.10 2005 6.60 10.50 2006 7.30 10.80 2007 7.80 11.20 2008 8.20 11.40 2009 8.30 11.30   (a) Which variable is the dependent variable and which is the independent variable? (b) Determine the estimated regression line. (c) Calculate the coefficient of determination. Give an economic interpretation to the value obtained. (d) Suppose that 8,000 construction permits are expected to be issued in 2010. What would be the point estimate of Phoenix Lumber Company's sales for 2010?     Q 3.           (B) Following output for the multiple regression problem shows results as results.   SUMMARY OUTPUT                         Regression Statistics           Multiple R 0.70955           R Square 0.503461           Adjusted R Square 0.410359           Standard Error 2.130054           Observations 20                         ANOVA               df SS MS F Significance F   Regression 3 73.60593 24.53531 5.40767 0.0092117   Residual 16 72.59407 4.537129       Total 19 146.2                         Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 48.63081 6.3247384 7.688984 9.2E-07 35.222968 62.038661 Price of Coke -0.3035 0.1711745 -1.77307 0.09525 -0.6663779 0.0593694 Ad Expenditure 0.342937 0.1655882 2.071021 0.05489 -0.0080947 0.6939678 Pepsi Price 0.23406 0.1393504 1.679653 0.11244 -0.0613493 0.5294699   Find and Interpret Adjusted Coefficient of Determination, Adjusted R2, and the Correlation Coefficient, R. The ANOVA table gives the F statistic for testing the claim that there is no significant relationship between your all of your independent and dependent variables.  The sig. value is your p value.  Using p-value decide you should Reject or Accept claim. Write the Fitted Regression line from the results? Decide about significance using the p-value.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
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Chapter1: Making Economics Decisions
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  • (A)

 

Phoenix Lumber Company uses the number of construction permits issued to help estimate demand (sales). The firm collected the following data on annual sales and number of construction permits issued in its market area:

 

 

No. of Construction

Sales

Year

Permits Issued (000)

(1,000,000)

 

 

 

2003

6.50

10.30

2004

6.20

10.10

2005

6.60

10.50

2006

7.30

10.80

2007

7.80

11.20

2008

8.20

11.40

2009

8.30

11.30

 

(a)

Which variable is the dependent variable and which is the independent variable?

(b)

Determine the estimated regression line.

(c)

Calculate the coefficient of determination. Give an economic interpretation to the value obtained.

(d)

Suppose that 8,000 construction permits are expected to be issued in 2010. What would be the point estimate of Phoenix Lumber Company's sales for 2010?

 

 

Q 3.           (B)

Following output for the multiple regression problem shows results as results.

 

SUMMARY OUTPUT

 

 

 

 

 

 

 

 

 

 

 

 

Regression Statistics

 

 

 

 

 

Multiple R

0.70955

 

 

 

 

 

R Square

0.503461

 

 

 

 

 

Adjusted R Square

0.410359

 

 

 

 

 

Standard Error

2.130054

 

 

 

 

 

Observations

20

 

 

 

 

 

 

 

 

 

 

 

 

ANOVA

 

 

 

 

 

 

 

df

SS

MS

F

Significance F

 

Regression

3

73.60593

24.53531

5.40767

0.0092117

 

Residual

16

72.59407

4.537129

 

 

 

Total

19

146.2

 

 

 

 

 

 

 

 

 

 

 

 

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

48.63081

6.3247384

7.688984

9.2E-07

35.222968

62.038661

Price of Coke

-0.3035

0.1711745

-1.77307

0.09525

-0.6663779

0.0593694

Ad Expenditure

0.342937

0.1655882

2.071021

0.05489

-0.0080947

0.6939678

Pepsi Price

0.23406

0.1393504

1.679653

0.11244

-0.0613493

0.5294699

 

  1. Find and Interpret Adjusted Coefficient of Determination, Adjusted R2, and the Correlation Coefficient, R.
  2. The ANOVA table gives the F statistic for testing the claim that there is no significant relationship between your all of your independent and dependent variables.  The sig. value is your p value.  Using p-value decide you should Reject or Accept claim.
  3. Write the Fitted Regression line from the results?
  4. Decide about significance using the p-value.

 

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