Question

Retail price data for  n = 60 hard disk drives were recently reported in a computer magazine. Three variables were recorded for each hard disk drive:

  y = Retail PRICE (measured in dollars)
  x ₁ = Microprocessor SPEED (measured in megahertz)
(Values in sample range from 10 to 40)
  x ₂ = CHIP size (measured in computer processing units)
(Values in sample range from 286 to 486)

A first-order regression model. was fit to the data. Part of the printout follows:

PARAMETER STANDARD T FOR O VARIABLE DF ESTIMATE ERROR PARAMETER =O PROB>ITI INTERCEPT 1 -373.526392 1258.1243396 -0.297 SPEED 104.838940 22.36298195 4.688 CHIP 1 3.571850 3.89422935 0.917 0.7676 0.0001 0.3629

Identify and interpret the estimate of  β ₂.

Answer 1

The estimate of $\beta_2$ is given by:

$\widehat{\beta_2}=3.571850$

Interpretation- For every increase in CHIP size (in computer processing units), the retail price would increase by $3.571850.