Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Statistics and Probability Expert

Fuel efficiency

We got a sample of 50 used cars sold in an auction and defined the following variables.
MPG Fuel efficiency, in miles per gallon
HP Strength of the engine, in horsepower
Repair Number of times the car was repaired before the auction
Foreign Equals 1 if the car is foreign made, 0 otherwise
We ran a regression to find out how certain characteristics of the car affect its fuel efficiency.

MPG | Coef. Std. Err. t P>|t|
-------------+----------------------------------------------------------------
HP | -0.2034169 0.02846808 -7.1454 0.0000
Foreign | 3.09772802 0.71535252 4.3304 0.0001
Repair | -3.132985 1.79280832 -1.7474 0.0874
_cons | 60.3810185 2.76109585 21.8685 0.0000

(a) Which coefficients are significant at the 5% level?

(b) What is the estimated coefficient of Foreign? Interpret this number (be precise).

(c) You are comparing two cars, the first one is US-made with a 150 hp engine, which has been repaired once, and the second one is a Japanese car with a 200 hp engine, which has not been repaired. Which car do you expect to have higher MPG, and by how much?

(d) A car auction specialist tells you that you forgot to include the car's AGE among the explanatory variables - after all, these are used cars. She says that in her experience (holding HP and Foreign fixed), older cars that come up on auctions tend to have been repaired more often, and age has a negative effect on fuel efficiency. Suppose that you include AGE in your regression, and the (new) coefficient on Repair turns out to be 1.19. Would this contradict her story? How about a coefficient of -4.67 (on Repair); would that contradict her story?

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M91620264
  • Price:- $20

Priced at Now at $20, Verified Solution

Have any Question?


Related Questions in Statistics and Probability

A new computer system will require an initial outlay of

A new computer system will require an initial outlay of $15,500, but it will increase the firm's cash flows by $3,100 a year for each of the next 7 years. How high can the discount rate be before you would reject the pro ...

One season the average little league baseball game averaged

One? season, the average little league baseball game averaged 2 hours and 54 minutes ?(174 ?minutes) to complete. Assume the length of games follows the normal distribution with a standard deviation of 10 minutes. Comple ...

A data firm records a large amount of data

A data firm records a large amount of data. Historically, 1.0% of the pages of data recorded by the firm contain errors. If two hundred pages of data are randomly selected? a.  What is the probability that six or more pa ...

The computer systems department has 8 faculty 6 are tenured

The computer systems department has 8 faculty, 6 are tenured. A committee is formed of 3 faculty members. If members are submitted at random: - What is the probability all members of the committee are tenured? - What is ...

A researcher selects from a participant pool of 8 males and

A researcher selects from a participant pool of 8 males and 11 females. He determines that the probability of selecting 2 female participants is p = .335. Based on this probability, what strategy did the researcher use t ...

What is the sample size for studies with moe of -35 and -28

What is the sample size for studies with MOE of +/-3.5% and +/-2.8%?, with a confidence level of 95%, sample statistics of .50? Please show work.

42 of the cars in a dealer lot are red 21 are black and 10

42% of the cars in a dealer lot are red, 21% are black and 10% are white. The remainder are some other unspecified color. Salespersons randomly shows three cars to three different customers. What is the probability the f ...

1i your company currently hasnbsp1000nbspparnbsp65

1 i. Your company currently has $1,000 ?par, 6.5 % coupon bonds with 10 years to maturity and a price of $1,082. If you want to issue new? 10-year coupon bonds at? par, what coupon rate do you need to? set? Assume that f ...

What is the annual coupon rate of a 7-year corporate bond

What is the annual coupon rate of a 7-year corporate bond given that its current price is $930, par = 1,000, semi-annual coupon, YTM=10%?

Amount of emails mean30find the probability that 20 emails

Amount of emails. Mean=30 Find the probability that 20 emails are received on the first day and 50 emails are received on the second day.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As