Question

The homeownership rate in the US. was 61.4% in 2009, In order to determine if homeownership is linked with income, 2009 state-level data on the homeownership rate (Ownership in %) and median household income (income in $) were collected. A portion of the data is shown in the accompanying table State Alabama Alaska ownership Income 36,000 57,624 66.7 62.5 Wyoming 68.2 48,490 XC a-1. Estimate the model Ownership = β0 + β1Income + ε. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.) [If you are using R to obtain the output, then first enter the following command at the prompt: options(scipen-10). This will ensure that the output is not in scientific notation.] Income + a-2. Interpret the model For a $1000 increase in income, homeownership rate is predicted to decrease by 0.01% - For a $1000 increase in income, homeownership rate is predicted to decrease by 0.1% For a $1000 increase in income, homeownership rate is predicted to decrease by 0.001%. For a $1000 increase in income, homeownership rate is predicted to decrease by 0.0001% b. What is the standard error of the estimate? (Round your answer to 2 decimal places.) Standard error c. Interpret the coefficient of determination (O 0.88% of the sample variation in y is explained by the estimated regression equation 0 618% of the sample variation in x is explained by the estimated regression equation 04.27% of the sample variation in x is explained by the estimated regression equation 2.48% of the sample variation in y is explained by the estimated regression equation. State Alabama Ownership Income 36000 57624 41759 32558 52154 51950 60871 48134 49161 41651 39360 51669 42798 48890 40325 46741 40737 38684 41453 43522 60206 55393 42014 52110 31098 44789 36457 45615 47454 60151 60797 39562 46236 37926 46095 41899 41898 45118 44192 47654 37121 41846 36537 43495 54511 48338 56521 56412 36510 47257 48490 Arizona Arkansas California Colorado Connecticut Delaware District of Co Florida Georgia Hawaii 66.2 0.7 Illinois Indiana lowa Kansas Kentucky Louisiana Maine 66.7 67.8 Massachuset Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampsl New Jersey New Mexico New York North Carolir North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolir South Dakota Tennessee Texas 67.7 66.9 57.6 66.2 67.2 Vermont Washington West Virgini Wisconsin Wyoming 68.2

Answer 1

Date: 19/04/2019 Answer a) The regression equation of ownership (v) on income (x) is, Byusing Excel software, find regression equation with help of following step:s 1) Import the data. 2) Select Data Analysis from Data menu. 3) Select Regression and click Olk 4)Input Y Range and Input X range. 5) Click Ok.

SUMMARY OUTPUT Multiple R R Square Adjusted R Square-0.011472645 Standard Error Observations 0.093577818 0.008756808 5.297656172 51 Coefficients Standard Error tStat P-value Intercept Income 66.5774623 4.644714339 14.33403 3.72E-19 6.57553E-05 9.99425E-05-0.65793 0.513661 From the Excel output, the regression equation of ownership (v) on income (r) is, 66.5775 -0.0001x a-2) Interpretationofslop

p--0.0001. For each unit increase in income, the mean ownership is estimated to decreases 0.0001, holding other independent variable are constant. The answer option is 1. b) The standard error ofestimate is., From Excel output in part (a), the standard error ofestimate is 5.30 c) Interpretation of coefficient of determination R" = 0.0088, 0.88% of sample variation in ownership。) can be explained by the model containing income The answer option is 1