In: Statistics and Probability
Osteoporosis is a degenerative disease that primarily affects women over the age of 49. A research analyst wants to forecast sales of StrongBones, a prescription drug for treating this debilitating disease. She uses the model Sales = β0 + β1Population + β2Income + ε, where Sales refers to the sales of StrongBones (in $1,000,000s), Population is the number of women over the age of 49 (in millions), and Income is the average income of women over the age of 49 (in $1,000s). She collects data on 39 cities across the United States and obtains the following regression results:
Coefficients | Standard Error |
t Stat | p-Value | |
Intercept | 10.11 | 3.66 | 2.76 | 0.0134 |
Population | 8.12 | 1.63 | 4.98 | 0.0156 |
Income | 7.05 | 6.07 | 1.16 | 0.3658 |
a. What is the sample regression equation? (Enter your answers in millions rounded to 2 decimal places.)
b-1. Interpret the coefficient of population.
b-2. Interpret the coefficient of income.
c. Predict sales if a city has 1.0 million women over the age of 49 and their average income is $35,000. (Enter your answer in millions rounded to 2 decimal places.)