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Question: Write a second-order model relating the mean of y, E(y), to

a. one quantitative independent variable

b. two quantitative independent variables

c. three quantitative independent variables [Hint: Include allpossible two- way cross-product terms and squared terms.]

Short Answer

Expert verified

a. The second-order model equation in one quantitative variable is

E(y)=β0+β1x1+β2x12+ε

b. The second-order model equation in two quantitative variables is

E(y)=β0+β1x1+β2x2+β3x12+β4x22

c. The second-order model equation in three quantitative variables is

E(y)=β0+β1x1+β2x2+β3x3+β4x1x2+β5x2x3+β6x1x3+β7x12+β8x22+β9x32

Step by step solution

01

Subsequent-sequence model equation

A Subsequent-sequence model relating mean of y, E(y) to one quantitative independent variable can be written as

E(y)=β0+β1x1+β2x2+β3x3+β4x1x2+β5x2x3+β6x1x3+β7x12+β8x22+β9x32

Here, β0denotes the y-intercept, β1denotes the slope of the regression line, and β3denotes the curvature of the parabola.

02

Second-order model equation

A second-order model relating the mean of y, E(y) to two quantitative independent variables can be written as

E(y)=β0+β1x1+β2x2+β3x12+β4x22

Here, β0denotes the y-intercept, β1denotes changes in y due to x1holdingx2 fixed, β2denotes changes in y due to x2holding x1fixed, β3denotes the curvature of the parabola relating y to x1when x2is held fixed, andβ4 denotes the curvature of the parabola relating y to x2when x1is held fixed.

03

Secondary-series model equation

A secondaryseries model relating mean of y, E(y) to three quantitative independent variables can be written as

E(y)=β0+β1x1+β2x2+β3x3+β4x1x2+β5x2x3+β6x1x3+β7x12+β8x22+β9x32

Here, β0denotes the y-intercept β1,β2and β3denotes changes in y due to changes in x holding other x constant, β4,β5and β6denotes the interaction variables and β7,β8and β9denotes the curvature of the parabola relating y to one x whenanother axis held fixed.

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Most popular questions from this chapter


Factors that impact an auditor’s judgment. A study was conducted to determine the effects of linguistic delivery style and client credibility on auditors’ judgments (Advances in Accounting and Behavioural Research, 2004). Two hundred auditors from Big 5 accounting firms were each asked to perform an analytical review of a fictitious client’s financial statement. The researchers gave the auditors different information on the client’s credibility and linguistic delivery style of the client’s explanation. Each auditor then provided an assessment of the likelihood that the client-provided explanation accounted for the fluctuation in the financial statement. The three variables of interest—credibility (x1), linguistic delivery style (x2) , and likelihood (y) —were all measured on a numerical scale. Regression analysis was used to fit the interaction model,y=β0+β1x1+β2x2+β3x1x2+ε . The results are summarized in the table at the bottom of page.

a) Interpret the phrase client credibility and linguistic delivery style interact in the words of the problem.

b) Give the null and alternative hypotheses for testing the overall adequacy of the model.

c) Conduct the test, part b, using the information in the table.

d) Give the null and alternative hypotheses for testing whether client credibility and linguistic delivery style interact.

e) Conduct the test, part d, using the information in the table.

f) The researchers estimated the slope of the likelihood–linguistic delivery style line at a low level of client credibility 1x1 = 222. Obtain this estimate and interpret it in the words of the problem.

g) The researchers also estimated the slope of the likelihood–linguistic delivery style line at a high level of client credibility 1x1 = 462. Obtain this estimate and interpret it in the words of the problem.

Question: Tilting in online poker. In poker, making bad decisions due to negative emotions is known as tilting. A study in the Journal of Gambling Studies (March, 2014) investigated the factors that affect the severity of tilting for online poker players. A survey of 214 online poker players produced data on the dependent variable, severity of tilting (y), measured on a 30-point scale (where higher values indicate a higher severity of tilting). Two independent variables measured were poker experience (x1, measured on a 30-point scale) and perceived effect of experience on tilting (x2, measured on a 28-point scale). The researchers fit the interaction model, . The results are shown below (p-values in parentheses).

  1. Evaluate the overall adequacy of the model using α = .01.

b. The researchers hypothesize that the rate of change of severity of tilting (y) with perceived effect of experience on tilting (x2) depends on poker experience (x1). Do you agree? Test using α = .01.

Role of retailer interest on shopping behavior. Retail interest is defined by marketers as the level of interest a consumer has in a given retail store. Marketing professors investigated the role of retailer interest in consumers’ shopping behavior (Journal of Retailing, Summer 2006). Using survey data collected for n = 375 consumers, the professors developed an interaction model for y = willingness of the consumer to shop at a retailer’s store in the future (called repatronage intentions) as a function of = consumer satisfaction and = retailer interest. The regression results are shown below.

(a) Is the overall model statistically useful for predicting y? Test using a=0.05

(b )Conduct a test for interaction at a= 0.05.

(c) Use the estimates to sketch the estimated relationship between repatronage intentions (y) and satisfaction when retailer interest is x2=1 (a low value).

(d)Repeat part c when retailer interest is x2= 7(a high value).

(e) Sketch the two lines, parts c and d, on the same graph to illustrate the nature of the interaction.

Question: Suppose the mean value E(y) of a response y is related to the quantitative independent variables x1and x2

E(y)=2+x1-3x2-x1x2

a. Identify and interpret the slope forx2.

b. Plot the linear relationship between E(y) andx2forx1=0,1,2, where.

c. How would you interpret the estimated slopes?

d. Use the lines you plotted in part b to determine the changes in E(y) for each x1=0,1,2.

e. Use your graph from part b to determine how much E(y) changes when3⩽x1⩽5and1⩽x2⩽3.

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