In: Statistics and Probability
The economic structure of Major League Baseball allows some
teams to make substantially more money than others, which in turn
allows some teams to spend much more on player salaries. These
teams might therefore be expected to have better players and win
more games on the field as a result. Suppose that after collecting
data on team payroll (in millions of dollars) and season win total
for 2019, we find a regression equation:
Wins = 81.77 + 0.134Payroll - 0.047League
Where League is an indicator variable that equals 0 if the team
plays in the National League or 1 if the team plays in the American
League.
a) Calculate the predicted number of wins for a National League
team with a payroll of $103 million
b) Calculate the predicted number of wins for an American League
team with a payroll of $97 million
c) Suppose we plotted the data and drew the regression lines for
National League and American League teams. What would be the slope
of the line for American League teams?
d) What would be the intercept of the line for the National League
teams?