Bob White is conducting research on monthly expenses for medical care, including over the counter medicine. His dependent variable is monthly expenses for medical care while his independent variables are number of family members and insurance type (government funded, private insurance and other). He has coded insurance type as the following:
X₂ = 1 if government funded, X₃ = 1 if private insurance
Below is his Excel output. (a) What is the prediction equation?
(b) Based on the significance F-test, is this model a good prediction equation?
(c) What percent of the variation in medical expenses is explained by the independent variables?
(d) Based on his model, what are the predicted monthly expenses for a family of four with private insurance?
(e) Based on his model, what are the predicted monthly expenses for a family of two with government funded insurance?
(f) Based on his model, what are the predicted monthly expenses for a family of five with no insurance?

Question

Bob White is conducting research on monthly expenses for medical care, including over the counter medicine. His dependent variable is monthly expenses for medical care while his independent variables are number of family members and insurance type (government funded, private insurance and other). He has coded insurance type as the following:
X₂ = 1 if government funded, X₃ = 1 if private insurance
Below is his Excel output.

(a) What is the prediction equation?
(b) Based on the significance F-test, is this model a good prediction equation?
(c) What percent of the variation in medical expenses is explained by the independent variables?
(d) Based on his model, what are the predicted monthly expenses for a family of four with private insurance?
(e) Based on his model, what are the predicted monthly expenses for a family of two with government funded insurance?
(f) Based on his model, what are the predicted monthly expenses for a family of five with no insurance?

Quizplus · Accepted Answer

The Answer of Bob White is conducting research on monthly expenses for medical care, including over the counter medicine. His dependent variable is monthly expenses for medical care while his independent variables are number of family members and insurance type (government funded, private insurance and other). He has coded insurance type as the following: X₂ = 1 if government funded, X₃ = 1 if private insurance Below is his Excel output. (a) What is the prediction equation? (b) Based on the significance F-test, is this model a good prediction equation? (c) What percent of the variation in medical expenses is explained by the independent variables? (d) Based on his model, what are the predicted monthly expenses for a family of four with private insurance? (e) Based on his model, what are the predicted monthly expenses for a family of two with government funded insurance? (f) Based on his model, what are the predicted monthly expenses for a family of five with no insurance?

Bob White Is Conducting Research on Monthly Expenses for Medical