Car purchase. A marketing research firm was engaged by an automobile
manufacturer to conduct a pilot study to examine the feasibility of using
logistic regression for ascertaining the likelihood that a family will
purchase a new car during the next year. A random sample of 33 suburban
families was selected. Data on annual family income \((X_{1},\) in thousand
dollars) \right. and the current age of the oldest family automobile \((X_{2},\)
in years) were obtained. A follow \right. up interview conducted 12 months
later was used to determine whether the family actually purchased a new
\(\operatorname{car}(Y=1)\) or did not purchase a new car \((Y=0)\) during the
year.
$$\begin{array}{rrrrrrr}
i: & 1 & 2 & 3 & \dots & 31 & 32 & 33 \\
\hline X_{n}: & 32 & 45 & 60 & \ldots & 21 & 32 & 17 \\
X_{12}: & 3 & 2 & 2 & \ldots & 3 & 5 & 17 \\
Y_{i:} & 0 & 0 & 1 & \ldots & 0 & 1 & 0
\end{array}$$
Multiple logistic regression model (14.41) with two predictor variables in
first-order terms is assumed to be appropriate.
a. Find the maximum likelihood estimates of \(\beta_{0}, \beta_{1},\) and
\(\beta_{2}\). State the fitted response function.
b. Obtain \(\exp \left(b_{1}\right)\) and \(\exp \left(b_{2}\right)\) and
interpret these numbers.
c. What is the estimated probability that a family with annual income of \(\$
50\) thousand and an oldest car of 3 years will purchase a new car next year?