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Regression analysis in Excel

A sociologist theorized that people who watch television frequently are exposed to many commercials, which in turn leads them to buy more, and finally increasing their debt. To test this belief, a sample of 430 families were drawn. For each, the total debt (D) and the number of hours the tv (T) is turned on per week were recorded. The following regression model was estimated: Di= Bo+ B1Ti +Ei

a.Fill in any gaps in the regression results in chart attached. Explain the calculations need to fill those gaps

b. interpret the results of this regression by answering the following:

i. Does tv have statistically significant effect on the level of debt?Explain hypothesis you are testing in answering this question and illustrate your answer graphically.

ii. if you answered yes to question i, explain why the effect is positive or negative.

iii. how large is effect of watching tv?

iv.How much of variation in debt levels is explained by this regression?

c. suppose you the sociologist knows that lower income people on average watch 25 hours of tv per week. calculate average level of debt for typical lower income person. Also show formula you would use to calculate the 95% prediction interval for a lower income person, but you need NOT perform the actual calculation.

d. Does this study demonstrate conclusively that watching more tv leads to higher levels of debt? Explain

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Solution Summary

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