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Question: Do blondes raise more funds? Refer to the Economic Letters (Vol. 100, 2008) study of whether the color of a female solicitor’s hair impacts the level of capital raised, Exercise 12.75 (p. 756). Recall that 955 households were contacted by a female solicitor to raise funds for hazard mitigation research. In addition to the household’s level of contribution (in dollars) and the hair color of the solicitor (blond Caucasian, brunette Caucasian, or minority female), the researcher also recorded the beauty rating of the solicitor (measured quantitatively, on a 10-point scale).

  1. Write a first-order model (with no interaction) for mean contribution level, E(y), as a function of a solicitor’s hair color and her beauty rating.
  2. Refer to the model, part a. For each hair color, express the change in contribution level for each 1-point increase in a solicitor’s beauty rating in terms of the model parameters.
  3. Write an interaction model for mean contribution level, E(y), as a function of a solicitor’s hair color and her beauty rating.
  4. Refer to the model, part c. For each hair color, express the change in contribution level for each 1-point increase in a solicitor’s beauty rating in terms of the model parameters.
  5. Refer to the model; part c. Illustrate the interaction with a graph.

Short Answer

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Answer

  1. A first-order model equation in one quantitative variable which is solicitor’s beauty rating here (say x1) and one qualitative variable which is solicitors’ hair color here with 3 levels (say variables introduced are (k-1) = 2;and x3 can be written as·¡(²â)=β0+β1x1+β2x2+β3x3
  2. For minority female the 1-point increase in solicitor’s beauty rating will be represented byβ1. For blond Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by(β0+β2)+β1x1. For brunette Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented byrole="math" localid="1651142480646" (β0+β3)+β1x1.
  3. An interaction model for mean contribution level, E(y) as a function of a solicitor’s hair color and beauty rating can be written as.E(y)=β0+β1x1+β2x2+β3x3+β4x1x2+β5x1x3
  4. For minority female the 1-point increase in solicitor’s beauty rating will be represented by. For blond Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by. For brunette Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by(β0+β3)+(β1+β5)β1x1.
  5. Graph

Step by step solution

01

First-order model equation

A first-order model equation in one quantitative variable which is solicitor’s beauty rating here (say x1) and one qualitative variable which is solicitors’ hair color here with 3 levels (say variables introduced are (k-1) = 2;x2and x3) can be written as·¡(²â)=β0+β1x1+β2x2+β3x3

.

02

Changes in β

Assume thatx2= solicitors’ hair color is blond Caucasian and x3= solicitors’ hair color is brunette Caucasian

The base level for hair is assumed to be minority female.

Therefore, for minority female the 1-point increase in solicitor’s beauty rating will be represented byβ1

For blond Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by(β0+β2)+β1x1

For brunette Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by(β0+β3)+β1x1

03

 Step 3: Interaction model

An interaction model for mean contribution level, E(y) as a function of a solicitor’s hair color and beauty rating can be written asE(y)=β0+β1x1+β2x2+β3x3+β4x1x2+β5x1x3

04

Interconnection model and interpretation of β 

Assume that x2 = solicitors’ hair color is blond Caucasian and x3= solicitors’ hair color is Brunette Caucasian

The base level for hair is assumed to be minority female.

Therefore, for minority female the 1-point increase in solicitor’s beauty rating will be represented byβ1

For blond Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented by(β0+β2)+(β1+β4)x1

For brunette Caucasian hair color of the solicitor, the 1-point increase in solicitor’s beauty rating will be represented byrole="math" localid="1651143179432" (β0+β3)+(β1+β5)β1x1

05

Graph

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Most popular questions from this chapter

Goal congruence in top management teams. Do chief executive officers (CEOs) and their top managers always agree on the goals of the company? Goal importance congruence between CEOs and vice presidents (VPs) was studied in the Academy of Management Journal (Feb. 2008). The researchers used regression to model a VP’s attitude toward the goal of improving efficiency (y) as a function of the two quantitative independent variables level of CEO (x1)leadership and level of congruence between the CEO and the VP (x2). A complete second-order model in x1and x2was fit to data collected for n = 517 top management team members at U.S. credit unions.

a. Write the complete second-order model for E(y).

b. The coefficient of determination for the model, part a, was reported asR2=0.14. Interpret this value.

c. The estimate of theβ-value for the(x2)2term in the model was found to be negative. Interpret this result, practically.

d. A t-test on theβ-value for the interaction term in the model,x1x2, resulted in a p-value of 0.02. Practically interpret this result, usingα=0.05.

Suppose you used Minitab to fit the model y=β0+β1x1+β2x2+ε

to n = 15 data points and obtained the printout shown below.

  1. What is the least squares prediction equation?

  2. Find R2and interpret its value.

  3. Is there sufficient evidence to indicate that the model is useful for predicting y? Conduct an F-test using α = .05.

  4. Test the null hypothesis H0: β1= 0 against the alternative hypothesis Ha: β1≠ 0. Test using α = .05. Draw the appropriate conclusions.

  5. Find the standard deviation of the regression model and interpret it.

Question: Reality TV and cosmetic surgery. Refer to the Body Image: An International Journal of Research (March 2010) study of the impact of reality TV shows on one’s desire to undergo cosmetic surgery, Exercise 12.17 (p. 725). Recall that psychologists used multiple regression to model desire to have cosmetic surgery (y) as a function of gender(x1) , self-esteem(x2) , body satisfaction(x3) , and impression of reality TV (x4). The SPSS printout below shows a confidence interval for E(y) for each of the first five students in the study.

  1. Interpret the confidence interval for E(y) for student 1.
  2. Interpret the confidence interval for E(y) for student 4

Question: Refer to Exercise 12.82.

a. Write a complete second-order model that relates E(y) to the quantitative variable.

b. Add the main effect terms for the qualitative variable (at three levels) to the model of part a.

c. Add terms to the model of part b to allow for interaction between the quantitative and qualitative independent variables.

d. Under what circumstances will the response curves of the model have the same shape but different y-intercepts?

e. Under what circumstances will the response curves of the model be parallel lines?

f. Under what circumstances will the response curves of the model be identical?

Explain why stepwise regression is used. What is its value in the model-building process?

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