In: Accounting
4. The following output is taken from applying Backward elimination variable selection
procedure to fit a regression model to predict Y (Earnings) using Scoring Avg., Greens in
Reg., Putting Avg. and Sand Saves. (consider α to remove = 0.05)
Regression Analysis: Earnings Scoring Avg., Greens in Reg., Putting Avg. and Sand Saves
Candidate terms: Scoring Avg., Greens in Reg., Putting Avg., Sand Saves
----Step 1---- -----Step 2---- Coef P Coef P Coef P
-----Step 3----
31737
-440.3 0.000
1507 0.022
262.749 64.57% 61.94% 39.06%
5.78
Constant 19835 ScoringAvg. -248
0.050 0.056 0.211 0.007
22252
-344.9 0.001
3726 0.092 1622 0.012
253.259 68.30% 64.64% 44.93%
4.64
Greens in Reg. Putting Avg. Sand Saves
4326 -2795 1767
S 250.178 R-sq 70.26% R-sq(adj) 65.50% R-sq(pred) 40.91%Mallows’ Cp 5.00
a) What variables should be included in the model from the above variable selection procedure?
b) According to this output, write down the estimated regression equation to predict Earnings.
The following output is taken from applying Best Subsets Regression to fit a regression model to
predict RPG (runs/game) statistic.
Best Subsets Regression: Earnings vs Scoring Avg., Greens in Reg., Putting Avg. and Sand Saves
Response is Earnings ($1000)
R-Sq Vars R-Sq (adj) 1 56.8 55.3 1 32.0 29.6 2 64.6 61.9 2 59.5 56.5
R-Sq Mallows (pred) Cp 28.1 10.3 0.4 31.1 39.1 5.8 29.8 10.1
G
r SeP ceu
ontS rsta iin nind gng
S ARAa vevv ggge S ...s
284.75 X 357.41 X 262.75 X X 281.05 X X
3 68.364.644.9 3 65.561.532.6 4 70.3 65.5 40.9
4.6253.26XXX 7.0264.35XXX 5.0 250.18 XXXX
c) Using R-Square adjusted as the criteria, what variables should be included in the best two- variable estimated regression equation?
A) What variables should be included in the model from the above variable selection procedure is given as below :
Of the output, p-value as X1=0.000 also as X4=0.022. Both from which do smaller than alpha=0.005. X1 including X4 do notable.
Therefore, X1 & X4 should do involved in the design i.e. Scoring avg. also Sand Saves should be held in the design.
B)According to this output, write down the estimated regression equation to predict Earnings are given below :
The equalization is as develops:
Of step 3, we notice, beta0=31737, beta1=-440.3, beta4=1507
y=31737-440.3*X1+1507*X4
hence, Earnings=31737-440.3*(Scoring Avg.)+1507*(Sand Saves) .
C) Utilizing R-Square set being the standards, what variables should be included in the best two-variable estimated regression equation is given as below :
Reminder: The more prominent the R-Square adjusted value, the greater is the design.
Of the output,
**** this largest R-square fixed value of 65.5 is achieved during all some variables are existing in the design.
**** Yet, specific topic questions as two-variables in the design.
Two-variables design are:
design 1': Variables-- X1 (Scoring Avg.) and X4 (Sand Saves) and R-square adjusted=61.9
design 2': Variables-- X1 (Scoring Avg.) and X2 (Greens in Reg.) and R-square adjusted=56.5
finally, 61.9 > 56.5
design1' is best than design2'.
Variables X1 (Scoring Avg.) & X4 (Sand Saves) should do involved in the ablest two-variable measured regression equation.