Question

{Exercise 16.3}

Dataset:

Rate	Starts
8.5	115
7.8	111
7.6	185
7.5	201
8.0	206
8.4	167
8.8	155
8.9	117
8.5	133
8.0	150

To determine how the number of housing starts is affected by mortgage rates an economist recorded the average mortgage rate and the number of housing starts in a large county for the past 10 years. These data are listed in dataset.

a) Determine the regression line (number of Starts = Rate).

bo = ______(to 2 decimals)

b1 = ______(to 1 decimal)

b) What do the coefficients of the regression line tell you about the relationship between mortgage rates and housing starts?

The slope coefficient tells us that for each additional 1 percentage point increase in mortgage rates, the number of housing starts _______ on average by ________(to 2 decimals).

Answer 1

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.542950618
R Square	0.294795374
Adjusted R Square	0.206644795
Standard Error	31.47717427
Observations	10
ANOVA
	df	SS	MS	F	Significance F
Regression	1	3313.5	3313.5	3.344225068	0.10484215
Residual	8	7926.5	990.8125
Total	9	11240
	Coefficients	Standard Error	t Stat	P-value	Lower 95%
Intercept	475.1666667	175.9053933	2.701262637	0.027021152	69.52810221
Rate	-39.16666667	21.41750431	-1.82872225	0.10484215	-88.55552016

a)

y^ = 475.16666 -39.16666 * rate

b0 = 475.17 , b1 = -39.2

b)

The slope coefficient tells us that for each additional 1 percentage point increase in mortgage rates, the number of housing starts ____decrease ___ on average by   39.17

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