TABLE 14-12
As a project for his business statistics class, a student examined the factors that determined parking meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus. The population regression model hypothesized is Y i = α + β 1 X 1 i + β 2 X 2 i + β 3 X 3 i + ε
where
Y is the meter price
X 1 is the number of blocks to the quad
X 2 is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X 3 is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the value 0 otherwise
The following Excel results are obtained.

-Referring to Table 14-12, if one is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated average parking meter rate will
A) decrease by 0.0045.
B) decrease by 0.0135.
C) decrease by 0.0139.
D) decrease by 0.4979.

Question

TABLE 14-12
As a project for his business statistics class, a student examined the factors that determined parking meter rates throughout the campus area. Data were collected for the price per hour of parking, blocks to the quadrangle, and one of the three jurisdictions: on campus, in downtown and off campus, or outside of downtown and off campus. The population regression model hypothesized is Y i = α + β 1 X 1 i + β 2 X 2 i + β 3 X 3 i + ε
where
Y is the meter price
X 1 is the number of blocks to the quad
X 2 is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise
X 3 is a dummy variable that takes the value 1 if the meter is located outside of downtown and off campus, and the value 0 otherwise
The following Excel results are obtained.
 
-Referring to Table 14-12, if one is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated average parking meter rate will
A) decrease by 0.0045. 
B) decrease by 0.0135. 
C) decrease by 0.0139. 
D) decrease by 0.4979.

Quizplus · Accepted Answer

The coefficient for X₁ is -0.0045, indicating that for every additional block to the quad, the estimated average parking meter rate decreases by $0.0045. Therefore, if one is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated average parking meter rate will decrease by 3 * $0.0045 = $0.0135.

TABLE 14-12 As a Project for His Business Statistics Class, a Student