Abby Kratz, a market specialist at the market research firm of Saez, Sikes, and Spitz, is analyzing household budget data collected by her firm.Abby's dependent variable is weekly household expenditures on groceries (in $'s), and her independent variables are annual household income (in $1,000's)and household neighborhood (0 = suburban, 1 = rural).Regression analysis of the data yielded the following table. $$\begin{array} { | l | r | r | r | r | }
\hline & \text { Coefficients } & \text { Stardard Error } & t \text { Statistic } & p \text {-value } \
\hline \text { Irtercept } & 19.68247 & 10.01176 & 1.965934 & 0.077667 \
\hline x _ { 1 } \text { (incorne) } & 1.735272 & 0.174564 & 9.940612 & 1.68 \mathrm { E } - 06 \
\hline x _ { 2 } \text { (neighborhood) } & 49.12456 & 7.655776 & 6.416667 & 7.67 \mathrm { E } - 05 \
\hline
\end{array}$$ For two households, one suburban and one rural, Abby's model predicts ________.

Question

Abby Kratz, a market specialist at the market research firm of Saez, Sikes, and Spitz, is analyzing household budget data collected by her firm.Abby's dependent variable is weekly household expenditures on groceries (in $'s), and her independent variables are annual household income (in $1,000's)and household neighborhood (0 = suburban, 1 = rural).Regression analysis of the data yielded the following table. $$\begin{array} { | l | r | r | r | r | } 
\hline & \text { Coefficients } & \text { Stardard Error } & t \text { Statistic } & p \text {-value } \
\hline \text { Irtercept } & 19.68247 & 10.01176 & 1.965934 & 0.077667 \
\hline x _ { 1 } \text { (incorne) } & 1.735272 & 0.174564 & 9.940612 & 1.68 \mathrm { E } - 06 \
\hline x _ { 2 } \text { (neighborhood) } & 49.12456 & 7.655776 & 6.416667 & 7.67 \mathrm { E } - 05 \
\hline
\end{array}$$ For two households, one suburban and one rural, Abby's model predicts ________.

Quizplus · Accepted Answer

The model predicts that the rural household's weekly expenditures for groceries will be $49 more than the suburban household, as indicated by the coefficient for the neighborhood variable (x2), which is 49.12456. This coefficient represents the difference in grocery expenditures between suburban (0) and rural (1) households.

Abby Kratz, a Market Specialist at the Market Research Firm