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Regression and Predictions. Exercises 13鈥28 use the same data sets as Exercises 13鈥28 in Section 10-1. In each case, find the regression equation, letting the first variable be the (x) variable. Find the indicated predicted value by following the prediction procedure summarized in Figure 10-5 on page 493.

Using the bill/tip data, find the best predicted tip amount for a dinner bill of $100. What tipping rule does the regression equation suggest?

Bill (dollars)

33.46

50.68

87.92

98.84

63.6

107.34

Tip (dollars)

5.5

5

8.08

17

12

16

Short Answer

Expert verified

The regression equation is\(\hat y = - 0.347 + 0.149x\).

The regression equation suggests that multiply the bill by 0.149 and then subtract 35 cents from it.

Step by step solution

01

Given information

Values are given on two variables namely, bill (dollars) and tip (dollars).

02

Calculate the mean values

Let x represent thebill (dollars).

Let y represent thetip (dollars).

Themean value of xis given as,

\(\begin{array}{c}\bar x = \frac{{\sum\limits_{i = 1}^n {{x_i}} }}{n}\\ = \frac{{33.46 + 50.68 + .... + 107.34}}{6}\\ = 73.640\end{array}\)

Therefore, the mean value of x is 73.64.

Themean value of yis given as,

\(\begin{array}{c}\bar y = \frac{{\sum\limits_{i = 1}^n {{y_i}} }}{n}\\ = \frac{{5.5 + 5 + .... + 16}}{6}\\ = 10.597\end{array}\)

Therefore, the mean value of y is 10.597.

03

Calculate the standard deviation of x and y

The standard deviation of xis given as,

\(\begin{array}{c}{s_x} = \sqrt {\frac{{\sum\limits_{i = 1}^n {{{({x_i} - \bar x)}^2}} }}{{n - 1}}} \\ = \sqrt {\frac{{{{\left( {33.46 - 73.64} \right)}^2} + {{\left( {50.68 - 73.64} \right)}^2} + ..... + {{\left( {107.34 - 73.64} \right)}^2}}}{{6 - 1}}} \\ = 29.042\end{array}\)

Therefore, the standard deviation of x is 29.042.

The standard deviation of yis given as,

\(\begin{array}{c}{s_y} = \sqrt {\frac{{\sum\limits_{i = 1}^n {{{({y_i} - \bar y)}^2}} }}{{n - 1}}} \\ = \sqrt {\frac{{{{\left( {5.5 - 10.597} \right)}^2} + {{\left( {5 - 10.597} \right)}^2} + ..... + {{\left( {16 - 10.597} \right)}^2}}}{{6 - 1}}} \\ = 5.212\end{array}\)

Therefore, the standard deviation of y is 5.211.

04

Calculate the correlation coefficient

The correlation coefficient is given as,

\(r = \frac{{n\left( {\sum {xy} } \right) - \left( {\sum x } \right)\left( {\sum y } \right)}}{{\sqrt {\left( {\left( {n\sum {{x^2}} } \right) - {{\left( {\sum x } \right)}^2}} \right)\left( {\left( {n\sum {{y^2}} } \right) - {{\left( {\sum y } \right)}^2}} \right)} }}\)

The calculations required to compute the correlation coefficient are as follows:

The correlation coefficient is given as,

\(\begin{array}{c}r = \frac{{n\left( {\sum {xy} } \right) - \left( {\sum x } \right)\left( {\sum y } \right)}}{{\sqrt {\left( {\left( {n\sum {{x^2}} } \right) - {{\left( {\sum x } \right)}^2}} \right)\left( {\left( {n\sum {{y^2}} } \right) - {{\left( {\sum y } \right)}^2}} \right)} }}\\ = \frac{{6\left( {5308.744} \right) - \left( {441.84} \right)\left( {63.58} \right)}}{{\sqrt {\left( {\left( {6 \times 36754.14} \right) - {{\left( {441.84} \right)}^2}} \right)\left( {\left( {6 \times 809.5364} \right) - {{\left( {63.58} \right)}^2}} \right)} }}\\ = 0.8282\end{array}\)

Therefore, the correlation coefficient is 0.8282.

05

Calculate the slope of the regression line

The slopeof the regression line is given as,

\(\begin{array}{c}{b_1} = r\frac{{{s_Y}}}{{{s_X}}}\\ = 0.8282 \times \frac{{5.212}}{{29.042}}\\ = 0.149\end{array}\)

Therefore, the value of slope is 0.149.

06

Calculate the intercept of the regression line

The interceptis computed as,

\(\begin{array}{c}{b_0} = \bar y - {b_1}\bar x\\ = 10.597 - \left( {0.1486 \times 73.640} \right)\\ = - 0.347\end{array}\)

Therefore, the value of intercept is -0.347 which is approximately -0.35.

07

Form a regression equation

Theregression equationis given as,

\(\begin{array}{c}\hat y = {b_0} + {b_1}x\\ = - 0.347 + 0.149x\\ \approx - 0.35 + 0.149x\end{array}\)

Thus, the regression equation is \(\hat y = - 0.35 + 0.149x\).

08

Analyze the model

Referring to exercise 25 of section 10-1,

1)The scatter plot shows an approximate linear relationship between the variables.

2)The P-value is 0.042.

As the P-value is less than the level of significance (0.05), this implies the null hypothesis is rejected.

Therefore, the correlation is significant.

Referring to figure 10-5,the criteria for a good regression model are satisfied.

Therefore, the regression equation can be used to predict the value of y.

The best predicted tip amount for a dinner bill of $100is computed as,

\(\begin{array}{c}\hat y = - 0.35 + \left( {0.149 \times 100} \right)\\ = 14.55\end{array}\)

Therefore, thebest predicted tip amount for a dinner bill of $100is $14.55.

09

State a general tipping rule

The tipping amount is predicted based on the bill by first multiplying the bill amount by 0.149 and then subtracting $0.35 from it. On the other hand, each $100 bill implies approximately $15 bill.

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Most popular questions from this chapter

Testing for a Linear Correlation. In Exercises 13鈥28, construct a scatterplot, and find the value of the linear correlation coefficient r. Also find the P-value or the critical values of r from Table A-6. Use a significance level of A = 0.05. Determine whether there is sufficient evidence to support a claim of a linear correlation between the two variables. (Save your work because the same data sets will be used in Section 10-2 exercises.)

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61

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45

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Pain Intensity Before Duragesic Treatment

1.2

1.3

1.5

1.6

8

3.4

3.5

2.8

2.6

2.2

3

7.1

2.3

2.1

3.4

6.4

5

4.2

2.8

3.9

5.2

6.9

6.9

5

5.5

6

5.5

8.6

9.4

10

7.6










Pain Intensity After Duragesic Treatment

0.4

1.4

1.8

2.9

6

1.4

0.7

3.9

0.9

1.8

0.9

9.3

8

6.8

2.3

0.4

0.7

1.2

4.5

2

1.6

2

2

6.8

6.6

4.1

4.6

2.9

5.4

4.8

4.1










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