Linear Correlation and Regression (I)

1. (shelf space and weekly sales)

(a) =yˆ 1.45 + 0.074 x or sales
ˆ = 1.45+0.074 * space
(b) For each square feet increase in space, the sales would increase by $7.4, on average.
(c) t = 0.074/0.0159 = 4.665 > t(10, 0.025) = 2.228. There is a linear relationship.
(d) space = 8 Þ sales
ˆ = 2.042 ® $204.2

2. (checkout time and value of purchase)

Time Value Coefficients Standard Error

3.6 30.6
Intercept 0.6202 0.2501
4.1 30.5
0.8 2.4 X Variable 1 0.1092 ?
5.7 42.2
3.4 21.8
1.8 6.2
4.3 40.1
0.2 2.0
2.6 15.5
1.3 6.5
mean 2.78 19.78
s.d. 1.74 15.45

(a) r = 0.9696
(b) CD = 94%
(c) SST = 27.248 SST/(10-1) = sample var of y = 1.74^2
(d) SSE = 1.635 SSE = SST-SSR = SST(1-CD)
(e) F = 125.7. The model is useful. F(1,8,0.05)= 5.32
(f) t = 11.21 ⇒ se(b1 ) = 0.0097. sqrt(125.7)=0.1092/se(b1)
3.

Regression Statistics

Multiple R 0.5490

R2 0.3014

Adjusted R2 0.2626

Standard Error 15.47

Observations 20

ANOVA df SS MS F

Regression 1 1858.98 1858.98 7.77

Residual 18 4308.82 239.38

Total 19 6167.8

Standard
Coefficients t Stat
Error
Intercept 21.8023 20.0715 1.09

X Variable 1 0.7522 0.27 2.79