Answered: FAIL? = 0.63 – 0.01*LOAN – 0.08*GIG? +…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Consider the following hypothetical regression, with FAIL? as a dummy variable for if a business failed in its first year (1=failed, 0=didn’t fail); LOAN is how much money, in thousands of dollars, the business got as a loan when it started; GIG? is a dummy variable for if there was a gig economy job available, such as driving for Lyft (1=available, 0=not available), and COMP is the number of existing competitors the business faced when it started. All variables are statistically significant.

FAIL? = 0.63 – 0.01*LOAN – 0.08*GIG? + 0.05*COMP

Answer the following:

Determine the predicted value of FAIL? if the business had a $30,000 loan, there was no gig economy, and four competitors.
In everyday language, what does the estimated value found in A mean?
If a business gets an additional six thousand dollars in loans, how would FAIL? change?
Give the “punchline” interpretation of the COMP variable: “For every additional competitor…”

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