# Multiple Regression Analysis : An Example

Problem:

The demand for airplane passengers (Y) is a function of a average fare (X1), the fare of the competing airline, and the annual per capital income of the passengers(X3)

Passenger seat sold Fare of the Fare of the competing Annual Per Capital

of the airline airline airline Income of passenger

648 250 250 $105

336 265 250 102

378 265 240 103

333 230 240 105

112 225 240 100

137 225 260 96

109 220 250 93

98 230 240 95

60 235 240 95

83 245 250 97

91 240 250 99

105 250 240 102

76 240 220 105

92 235 250 108

113 235 230 110

102 240 240 109

Questions:

1. Find the demand for passenger seat (Y) as a function of the fare of the airline(X1), the fare f the competing airline (X2), and the annual per capital income of passengers (X3).

2. Graph the actual and the estimated Y and assess the goodness of fit.

3. State the effects of each of the independent variable on the demand for passengers.

4. State the significance or non significance of each of the independent variables.

5. If the fare of the airline increases to $300 (X1=300), the fare of the competing airline is $200 (X2=$200) and the annual income is (X3=$120), find how many tickets will the airline sell?

https://brainmass.com/statistics/regression-analysis/multiple-regression-analysis-an-example-276363

#### Solution Summary

In the present problem an example for multiple regression analysis has been worked out. The general procedure for implementing multiple regression analysis by using regression analysis tool of M S Excel is provided. Explanations are given, for how to interpret the estimated regression parameters such as the regression coefficients, coefficient of determination etc. The excel sheet in which the example is worked out is also provided as an attachment.