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 monthly household expenditures on groceries (in $'s),and her independent variable is annual household income (in $1,000's).Regression analysis of the data yielded the following tables. Abby's regression model is __________.

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 monthly household expenditures on groceries (in $'s),and her independent variable is annual household income (in $1,000's).Regression analysis of the data yielded the following tables.   Abby's regression model is __________.

Quizplus · Accepted Answer

Looking at the regression equation, we see that the intercept (the point at which the regression line intersects the y-axis) is $39.15. Since this is the amount of monthly grocery expenditures when annual household income is $0, we know that this term must be included in the equation. The coefficient on annual household income is 1.79. Since we expect households with higher incomes to spend more on groceries, we would expect this coefficient to be positive. Therefore, the regression model is y = $39.15 + $1.79x.

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