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Consider the regression model y-80 + β1 x1 + β2x2 + e where x1 and x2 are as defined below. x1 = A quantitative variable lifx

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Answer #1

a) The estimated regression equation when x1<20:

y = 25.7 + 5.5x1 + 7.8x2

x2 = 1 if x1<20

Hence, y = 25.7 + 5.5x1 + 7.8*1

Y = 33.5 + 5.5 x1

B) When x1 = 15, we can use the above equation to find out the value of y:

Y = 33.5 + 5.5*15

Y = 33.5 + 82.5

Y = 116

C) The estimated regression equation when x1>20:

y = 25.7 + 5.5x1 + 7.8x2

x2 = 0 if x1>20

Hence, y = 25.7 + 5.5x1 + 7.8*0

Y = 25.7 + 5.5 x1

D) When x1 = 30, we can use the above equation in part c) to find y:

Y = 25.7 + 5.5*30

Y = 25.7 + 165

Y = 190.7

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