Consider the following regression equation: = 356 + 180x1 - 2.5x2. The x1 variable is a quantitative variable and the x2 variable is a dummy with values 1 and 0. Given this, we can interpret the slope coefficient on variable x2 as follows: Holding x1 constant, if the value of x2 is changed from 0 to 1, the average value of y will decrease by 2.5 units.

Question

Quizplus · Accepted Answer

The coefficient of -2.5 for x2 in the regression equation indicates that, holding x1 constant, a one-unit increase in x2 (from 0 to 1, since it's a dummy variable) will result in a decrease of 2.5 units in the predicted value of y.

Consider the Following Regression Equation: = 356 + 180x1 -