The local utility company surveys 101 randomly selected customers. For each survey participant, the company collects the following: annual electric bill (in dollars) and home size (in square feet). Regression equation: Annual bill = 0.55* Home size + 15 Output from a regression analysis appears below. Is there a significant linear relationship between annual bill and home size? Use a 0.01 level of significance. Predictor constant Home size coefficient 15 0.55 Standard Error 3 0.24 T statistic 5.0 2.29 P value 0.00 0.01
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Current Answer: Given the hypothesis of H0: β=0 where there is no relationship and HA: β≠0, we can calculate the t-value to be 2.29, as stated in the chart above for home size. The p-value for home size would be 0.0120 or 0.01, as stated in the chart. Comparing this to the level of significance (using the 0.0120 versus just the 0.01 since it is exactly the same), we can say that we reject the null hypothesis. We then can conclude that there is a relationship between the size of a house and its electric bill.
*I was not sure if this was right or not. Please let me know if I am on the right track with this question. I would very much appreciate it!
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