Question

Exercise 7. Vendor analysis. A researcher studied the vendors in a locality and the relationship between their age (years), hours worked per day, and their annual earnings Vendor Hours, xAge, x2 | Earnings ($), y 1 12 29 2841 1876 2 8 21 3 10 62 2934 10 18 1552 4 5 11 40 3065 6 11 50 3670 7 5 65 2005 8: 44 3215 9 17 1930 10 6 70 2010

Find the standard error of estimate and interpret the result.

Answer 1

Following is the output of regression analysis:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.687496416
R Square	0.472651322
Adjusted R Square	0.321980272
Standard Error	588.7517867
Observations	10
ANOVA
	df	SS	MS	F	Significance F
Regression	2	2174730.936	1087365	3.136975	0.106498261
Residual	7	2426400.664	346628.7
Total	9	4601131.6
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	682.6505027	814.66359	0.837954	0.429736	-1243.72278	2609.023784
X1	146.8135268	87.12732722	1.685046	0.135848	-59.209864	352.8369177
X2	14.62104237	9.403344652	1.554877	0.163925	-7.61433443	36.85641918

From result the estimated standard error of regression is

SE 588.7518

It shows the variation in the predicted values, predicted by the fitted model. Since SE is large so it shows that model is moderate fit.