TABLE 13-6
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 four variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X1), the amount of insulation in inches (X2), the number of windows in the house (X3), and the age of the furnace in years (X4). Given below are the Microsoft Excel outputs of two regression models.

-The coefficient of multiple determination, r², measures the proportion of variation in Y that is explained by X₁ and X₂.

Question

TABLE 13-6
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 four variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit (X1), the amount of insulation in inches (X2), the number of windows in the house (X3), and the age of the furnace in years (X4). Given below are the Microsoft Excel outputs of two regression models.

-The coefficient of multiple determination, r², measures the proportion of variation in Y that is explained by X₁ and X₂.

Quizplus · Accepted Answer

The coefficient of multiple determination, r², measures the proportion of variation in Y that is explained by all of the predictor variables included in the regression model, not just X₁ and X₂.

TABLE 13-6 One of the Most Common Questions of Prospective House Buyers