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3.4 Exercises: Fare Distance + +

1. The document describes steps for simple linear regression analysis: - Draw a scatter plot of the data and fit an initial model based on subject matter expertise or the scatter plot. - Assess the model adequacy, checking if the functional form and error variances are correct. - Check for outliers and leverage points, adding or transforming terms if needed. - Determine if the sample size is large enough and if the association between Y and X is significant. - Check if errors are normally distributed and remove outliers if needed. - Use the final model for inference or stop if no significant association is found.

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214 views1 page

3.4 Exercises: Fare Distance + +

1. The document describes steps for simple linear regression analysis: - Draw a scatter plot of the data and fit an initial model based on subject matter expertise or the scatter plot. - Assess the model adequacy, checking if the functional form and error variances are correct. - Check for outliers and leverage points, adding or transforming terms if needed. - Determine if the sample size is large enough and if the association between Y and X is significant. - Check if errors are normally distributed and remove outliers if needed. - Use the final model for inference or stop if no significant association is found.

Uploaded by

lunática por lutteo soy luna forever
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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3.

4 Exercises 103

Draw a scatter plot of the data

Fit a model based on subject matter expertise


and/or observation of the scatter plot

Assess the adequacy of the model in particular:


Is the functional form of the model correct?
Do the errors have constant variance?

YES NO

Do outliers and/or leverage Add new terms to the model


points exist? and/or transform x and/orY

NO YES
Is the sample size large?
Are the outliers and leverage
YES NO points valid?

Based on Analysis of NO
Variance or a t-test Are the errors
YES Remove them
decide if there is a YES normally dis-
and refit the
significant association tributed?
model
betweenY and x?
NO
YES NO
Consider
Use the boot-
modifications
strap for in-
Use the final to the model
ference
model to form Stop!
confidence
intervals

Figure 3.40 Flow chart for simple linear regression

3.4 Exercises

1. The data file airfares.txt on the book web site gives the one-way airfare (in US dol-
lars) and distance (in miles) from city A to 17 other cities in the US. Interest centers
on modeling airfare as a function of distance. The first model fit to the data was

Fare = b 0 + b1 Distance + e (3.7)

(a) Based on the output for model (3.7) a business analyst concluded the
following:
The regression coefficient of the predictor variable, Distance is highly statistically signifi-
cant and the model explains 99.4% of the variability in the Y-variable, Fare. Thus model
(1) is a highly effective model for both understanding the effects of Distance on Fare and
for predicting future values of Fare given the value of the predictor variable, Distance.

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