Interpreting Regression Results Recent research into the cost of various medical procedures has shown the impact of certain complications encountered in surgery on the total cost of a patient’s stay in the hospital. The researchers used regression analysis and found the following results:
Total cost for patient = Constant, plus
a× Length of stay (measured in days), plus
b× Presence of one or more complications (= 1 if true, 0 if false), plus
c× Use of a laparoscope (= 1 if true, 0 if false)
Where:
• a, b, c are coefficients of the regression model, and
• The laparoscope is an instrument somewhat like a miniature telescope with a fiber optic system which brings light into the abdomen. It is about as big around as a fountain pen and twice as long.
The research, based on 57 patients, showed the following regression results:
R-squared: 53%
Constant term: $3,719
Coefficients and t-values for independent variables:
Required
1. What is the estimated cost for a patient whose surgery has complications and who stays in the hospital two days, and whose surgery requires a laparoscope?
2. Which, if any, dummy variables are used in this regression?
3. Comment on the statistical measures for the model.
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