BA 1502 Spring 2020

HW9 Answers

Using the data provided on METUClass website for this homework, regress electricity consumption on
the temperature and answer the following questions:

1) Report your regression output from Excel.

Regresyon İstatistikleri
Çoklu R 0.875351773
R Kare 0.766240726
Ayarlı R Kare 0.755615305
Standart Hata 84.95082615
Gözlem 24

ANOVA
df SS MS F Anlamlılık F
Regresyon 1 520420.357 520420.4 72.11391 2.16123E-08
Fark 22 158766.143 7216.643
Toplam 23 679186.5

Katsayılar Standart Hata t Stat P-değeri Düşük %95 Yüksek %95

Kesişim 856.6414891 29.71254348 28.83097 5.7E-19 795.0214454 918.2615328
Avg Daily Temp (deg C) -17.38961165 2.047766113 -8.49199 2.16E-08 -21.63641864 -13.14280466

2) Write down the estimated regression equation.

̂ = 856.6415 – 17.4X
Y
a. What is the value of b0? Explain what b0 means in the context of this example.

b0= 856.6415. The estimated average electricity consumption when temperature is zero.

b. What is the value of b1? Explain what b1 means in the context of this example.

b1= -17.4. When temperature increases by one degree the average electricity consumption
declines by 17.4 kWhs

3) Test the following. Write down hypotheses, test statistics and p-values. State your conclusions.
a. B0 = 0

H0:  0=0

H1:  00 tstat = 28.83097 and p-value= 5.7*10-19.

Since p-value is less then =0.05 we reject the null hypothesis. We have evidence that the average
electricity consumption is not zero when temperature is equal to zero.

b. B1 = 0

H0:  1 = 0

H1:  10 tstat = -8.49199 and p-value= 2.16*10-19.

Since p-value is less then =0.05 we reject the null hypothesis. We have evidence that temperature has
a statistically meaningful relationship with electricity consumption.

4) Test the overall significance using ANOVA F-test. What are the hypotheses, F test statistic, and
p-value? What do you conclude? Does this differ from part b of question 2?

H0:  0=1=0

H1:  00 and/or 10 Fstat= 72.11391 and p-value=2.16*10-19.

Since p-value is less than =0.05 we reject the null hypothesis. We have evidence that the overall model
is significant. This test is identical to the t test for 1 = 0. Infact F = t2 and p-values are the same. In
simple regression since we have only one variable (only one slope) testing te significance of that single
slope is the same as testing the overall significance of the model.

5) Report R2 and explain what it means in this case context.

R2 = 0.7662. About 76.62% of the variation in electricity consumption can be explained by changes in
daily temperature.

6) Report standard error of the estimate. How does it compare to Y values?

SEE = 84.95. Since the SEE value is small relative to the average (651.75) of the dependent variable, we
can say that precision of our model is high.

7) Report the 95% confidence interval for the slope. Explain what it means.

(-21.64, -13.14). WE are 95% confident that as temperature increases by one degree, the average
electricity consumption will decline between 21.64 and 13.14 kWhs.

8) Predict electricity consumption for a day with 20 degrees C.

̂ = 856.6415 – 17.4(20) = 509 kWhs
Y