Question

I have to complete a multiple regression analysis using the quantity of coal as the dependent variable with the price and GDP as the independent variables. The problem I am having is that when I perform the regression analysis I can't get the Price to be negative and the GDP to be positive. I am attaching the spreadsheet for your reference. Any assistance you can provide will be greatly appreciated.

SUMMARY OUTPUT Regression Statistics Multiple R 0.971595991 R Square 0.94399877 Adjusted R Square 0.938665319 Standard Error 1421924.251 Observations 24 ANOVA Quantity (Thousand Short Tons) Price 1 Quarterly Data Sales (Qd) (Dollars per short ton) GDP Jan-13 31,835,000 $3,173,312,800 $16,382,964,000,000 Apr-13 29,427,000 $2,363,800,790 $16,403,180,000,000 Jul-13 28,589,000 $2,619,895,960 $16,531,685,000,000 Oct-13 27,809,000 $2,543,411,140 $16,663,649,000,000 Jan-14 27,584,000 $2,502,420,480 $16,616,540,000,000 Apr-14 24,674,000 $2,127,885,760 $16,841,475,000,000 Jul-14 22,723,000 $1,947,133,870 $17,047,098,000,000 Oct-14 22,276,000 $1,892,123,440 $17,143,038,000,000 Jan-15 21,979,000 $1,809,091,490 $17,277,580,000,000 Apr-15 19,766,000 $1,584,047,240 $17,405,669,000,000 Jul-15 16,914,000 $1,243,517,280 $17,463,222,000,000 Oct-15 15,299,000 $1,049,664,390 $17,468,902,000,000 Jan-16 14,153,000 $869,135,730 $17,556,839,000,000 Apr-16 14,223,000 $935,731,170 $17,639,417,000,000 Jul-16 12,552,000 $951,647,720 $17,735,074,000,000 Oct-16 19,343,000 $1,790,581,510 $17,824,231,000,000 Jan-17 22,307,000 $2,463,585,080 $17,925,256,000,000 Apr-17 21,796,000 $2,411,727,400 $18,021,048,000,000 Jul-17 24,644,000 $2,434,580,760 $18,163,558,000,000 Oct-17 28,206,000 $2,555,181,540 $18,322,464,000,000 Jan-18 27,221,000 $2,879,437,380 $18,438,254,000,000 Apr-18 30,876,000 $3,188,255,760 $18,598,135,000,000 Jul-18 29,067,000 $2,886,353,100 $18,732,720,000,000 Oct-18 28,469,000 $3,091,164,020 $18,783,548,000,000 Dependent Independent Var Independent Var Regression Residual 2 21 23 SS 7.15725E+14 4.24592E+13 7.58184E+14 Total Intercept Price GDP Coefficients 34576158.11 0.007723768 -1.57827E-06 Standard Error 7021270.732 0.000410945 4.05001E-07 Coal Sales= a-b (Price of coal) + c(US GDP) + error Coal Sales 34,576,158.11 -0.007723768 (Price of Coal) +-.O

Answer 1

Ans: From the table of coefficients, the regression mode is, Coal sales = 34576158.11 +0.007723 768 (Price of coal) -0.00000167827 (US GOP). - This regression model means: . 1) The coefficient of price of coal is 0.007723768. This means if price of coal is increased by 1 unit then coal sales will be increased by 0.007723768 units. 2 The coefficient of Us GDP is -0.00000157 827. This means if US GDP is increased by 1 unit then coal sales will be decreased by 0.00000157827 units. Here price of coal and Us GDP values are always positive. You can predict coal sales by using equation # if you put price of coal. (positive value) and Us GOP (Positive value). in equation