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. 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.  For two households,one suburban and one rural,Abby's model predicts ________.

Quizplus · Accepted Answer

According to the regression analysis table, the coefficient for the household neighborhood variable is 49. This means that, holding household income constant, rural households spend $49 more per week on groceries than suburban households. Therefore, Abby's model predicts that the rural household will have higher weekly expenditures on groceries than the suburban household.

Abby Kratz,a Market Specialist at the Market Research Firm of Saez,Sikes,and