The Cronch Café, located at the Gulf of Mexico, has an increase in business during the summer vacation season. The owner hires a large number of servers as seasonal help. When he interviews a prospective server, he would like to provide data on the amount a server can earn in tips. He believes that the amount of the bill and the number of diners are both related to the amount of the tip. He gathered this sample information. 1) Develop a multiple regression model with the amount of tips as the dependent variable and the amount of the bill and the amount of diners as independent variables. Write out the regression equation. How much does another diner add to the amount of the tips? 2) Conduct a global test of hypothesis to determine if at least one of the independent variables is significant. What is your conclusion? Customer Amount of Tip ($) Amount of Bill ($) Diners 1 5.15 74.5 2 2 4.5 28.23 4 3 1 10.65 1 4 2.4 19.82 3 5 5 28.62 3 6 4.25 24.83 2 7 0.5 6.25 1 8 6 49.2 4 9 5 43.26 3 10 4.65 62.23 1 11 5.6 84.81 1 12 6 34.99 3 13 4 33.91 4 14 3.35 23.06 2 15 0.75 4.65 1 16 3.3 23.59 2 17 3.5 22.3 2 18 3.25 32 2 19 5.4 50.02 4 20 2.25 17.6 3 21 4.35 63.16 6 22 3 20.27 2 23 1.25 19.53 2 24 3.25 27.03 3 25 3 21.28 2 26 6.25 43.38 4 27 5.6 28.12 4 28 2.5 26.25 2 29 6.85 53.08 7 30 8.6 87.85 8
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
The Cronch Café, located at the Gulf of Mexico, has an increase in business during the summer vacation season. The owner hires a large number of servers as seasonal help. When he interviews a prospective server, he would like to provide data on the amount a server can earn in tips. He believes that the amount of the bill and the number of diners are both related to the amount of the tip. He gathered this sample information. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1) Develop a multiple regression model with the amount of tips as the dependent variable and the amount of the bill and the amount of diners as independent variables. Write out the regression equation. How much does another diner add to the amount of the tips? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2) Conduct a global test of hypothesis to determine if at least one of the independent variables is significant. What is your conclusion? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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