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Multiple Regression Analysis

The total expenses of a hospital are related to many factors. Two of these factors are the number of beds in the hospital and the number of admissions. Data were collected on the 14 hospitals, as shown in the table:

HOSPITAL NUMBER OF BED's ADMISSSIONS (100s) TOTAL EXPENSES (MILLIONS)
1 215 77 57
2 336 160 127
3 520 230 157
4 135 43 24
5 35 9 14
6 210 155 93
7 140 53 45
8 90 6 6
9 410 159 99
10 50 18 12
11 65 16 11
12 42 29 15
13 110 28 21
14 305 98 63

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ASSIGNMENT:

* State the linear equation,
* Explain the overall statistical significance of the model,
* Explain the statistical significance for each independent variable in the model
* Interpret the Adjusted R2,
* Is this a good predictive equation(s)? Which variables should be excluded (if any) and why? Explain.

Solution Preview

We're going to look at the relationship between the number of beds in the hospital, the number of admissions, and the total expenses.
The independent variables are beds and admissions. The dependent variable is expenses.
I used Excel to do a linear regression.

State the linear equation,

The linear equation is expenses = 0.023*beds + 0.623*admissions - 0.654.

Explain ...

$2.19