SCENARIO 14-6 One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit ( X 1 ) and the amount of insulation in inches ( X 2 ). Given below is EXCEL output of the regression model. Also SSR (X 1 | X 2 ) = 8343.3572 and SSR (X 2 | X 1 ) = 4199.2672 -Referring to Scenario 14-6,what is your decision and conclusion for the test H₀: $\beta$₂ = 0 vs.H₁: $\beta$₂ $\neq$ 0 at the $\alpha$ = 0.01 level of significance? A)Do not reject H₀ and conclude that the amount of insulation has a linear effect on heating costs. B)Reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs. C)Reject H₀ and conclude that the amount of insulation has a linear effect on heating costs. D)Do not reject H₀ and conclude that the amount of insulation does not have a linear effect on heating costs.

Question

Quizplus · Accepted Answer

If the null hypothesis is rejected, it indicates that there is a statistically significant linear relationship between the amount of insulation and heating costs at the 0.01 level of significance.

SCENARIO 14-6 One of the Most Common Questions of Prospective β\betaβ

SCENARIO 14-6
One of the Most Common Questions of Prospective $\beta$