Question

Download the Gas Consumption Data into Excel:

Gas tax (cents per gallon),Average income (dollars),Paved Highways (miles),Proportion of population with driver's licenses,Consumption of gas (millions of gallons)
9,3571,1976,0.525,541
9,4092,1250,0.572,524
9,3865,1586,0.58,561
7.5,4870,2351,0.529,414
8,4399,431,0.544,410
10,5342,1333,0.571,457
8,5319,11868,0.451,344
8,5126,2138,0.553,467
8,4447,8577,0.529,464
7,4512,8507,0.552,498
8,4391,5939,0.53,580
7.5,5126,14186,0.525,471
7,4817,6930,0.574,525
7,4207,6580,0.545,508
7,4332,8159,0.608,566
7,4318,10340,0.586,635
7,4206,8508,0.572,603
7,3718,4725,0.54,714
7,4716,5915,0.724,865
8.5,4341,6010,0.677,640
7,4593,7834,0.663,649
8,4983,602,0.602,540
9,4897,2449,0.511,464
9,4258,4686,0.517,547
8.5,4574,2619,0.551,460
9,3721,4746,0.544,566
8,3448,5399,0.548,577
7.5,3846,9061,0.579,631
8,4188,5975,0.563,574
9,3601,4650,0.493,534
7,3640,6905,0.518,571
7,3333,6594,0.513,554
8,3063,6524,0.578,577
7.5,3357,4121,0.547,628
8,3528,3495,0.487,487
6.58,3802,7834,0.629,644
5,4045,17782,0.566,640
7,3897,6385,0.586,704
8.5,3635,3274,0.663,648
7,4345,3905,0.672,968
7,4449,4639,0.626,587
7,3656,3985,0.563,699
7,4300,3635,0.603,632
7,3745,2611,0.508,591
6,5215,2302,0.672,782
9,4476,3942,0.571,510
7,4296,4083,0.623,610
7,5002,9794,0.593,524

1) Looking at the variables, which ones do you think will affect gasoline consumption? Of the variables you think are important, which direction do you think the effect will be (i.e., what sign will its coefficient take)? 2) Now run a regression with gas consumption as the dependent variable and use the independent variables that you think are important. Discuss your results.

Answer 1

Based on direction only, it seems proportion of population is significant with positive relationship. And paved highways (miles) has a negative relationship.

2.

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.785818
R Square	0.61751
Adjusted R Square	0.60051
Standard Error	70.71766
Observations	48
ANOVA
	df	SS	MS	F	Significance F
Regression	2	363322.1	181661	36.32504	4.06E-10
Residual	45	225044.4	5000.987
Total	47	588366.5
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	7.837092	122.463	0.063996	0.949257	-238.816	254.4903	-238.816	254.4903
Highways	-0.07092	0.018209	-3.8951	0.000323	-0.1076	-0.03425	-0.1076	-0.03425
Driver's licenses	1525.043	188.2969	8.099141	2.47E-10	1145.794	1904.292	1145.794	1904.292

The variables are significant as per the direction expected above

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