# Multiple regression in Excel

Problem #1: The Texas Transportation institute at texas A&M university conducted a survey to determine the number of hours per year drivers wasted sitting in traffic. the table below shows the number of hours wasted per year sitting in traffic.

Denver Miami San Francisco

70 66 65

62 70 62

71 55 74

58 65 69

57 56 63

66 66 75

a- compute the sample mean hours wasted per year for each of these urban areas.

b- using the .05% level of significance, test for significance difference between the mean wasted time for these urban areas.

c- what is your conclusion

d- perform all analysis using the Excel Data Analysis Tool

Problem #2: management of showtime movie theatres inc. would like to estimate the weekly gross revenue as a function of advertising expenditures. historical data for a sample of eight weeks is presented below:

Wkly Gross Rev. Television Advertising Newspaper Advertising

96 5.0 1.5

90 2.0 2.0

95 4.0 1.5

92 2.5 2.5

95 3.0 3.3

94 3.5 2.3

94 2.5 4.2

94 3.0 2.5

A- estimate a regression equation with only the amount of television advertising as the independent variable.

b- Put the results in summary form. test the significance of the estimated parameters at the .05% level of significance? how much of the variation in weekly revenue is explained by this econometric model?

c- Estimate a regression equation with both the amount of television advertising expenditures as the independent variables (Multiple Regression)

d- put the results in summary form. Test the significance of the estimated parameters at the .05% level of significance? Test for overall significance of the model (ANOVA) how much of the variation in weekly revenue is explained by this econometric model?

e- What is the estimate of weekly gross revenues for a week when $3500 is spent on television advertising and $1800 is spent on newspaper advertising?

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#### Solution Summary

The solution provides step by step method for the calculation of multiple regression model in excel . Formula for the calculation and Interpretations of the results are also included.