SCENARIO 18-7 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 where Y is the meter price is the number of blocks to the quad is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise 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 Scenario 18-7, if one is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated mean parking meter rate will
A)decrease by 0.0045.
B)decrease by 0.0137.
C)decrease by 0.0139.
D)decrease by 0.4979.

Question

SCENARIO 18-7 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  where Y is the meter price  is the number of blocks to the quad  is a dummy variable that takes the value 1 if the meter is located in downtown and off campus and the value 0 otherwise  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 Scenario 18-7, if one is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated mean parking meter rate will
A)decrease by 0.0045. 
B)decrease by 0.0137. 
C)decrease by 0.0139. 
D)decrease by 0.4979.

Quizplus · Accepted Answer

According to the regression equation, the coefficient for the number of blocks variable (BX) is -0.0137. This means that for every additional block, the estimated mean parking meter rate will decrease by 0.0137, holding all other variables constant. From the regression model, we can see that the coefficient for the variable "blocks to the quadrant" is -0.0137. This means that for every increase in one unit of blocks to the quadrant, the estimated mean parking meter rate will decrease by 0.0137 units, holding all other variables constant. Therefore, if someone is already outside of downtown and off campus but decides to park 3 more blocks from the quad, the estimated mean parking meter rate will decrease by 3 x (-0.0137) = -0.0411 or approximately -0.0137 (rounded to three decimal places).

SCENARIO 18-7 as a Project for His Business Statistics Class