## MINITAB

Using MINITAB perform the regression and correlation analysis for the data on INCOME (Y, the dependent variable) and CREDIT BALANCE (X, the independent variable) by answering the following.

1.Generate a scatterplot for INCOME vs. CREDIT BALANCE, including the graph of the “best fit” line. Interpret.

2.Determine the equation of the “best fit” line, which describes the relationship between INCOME and CREDIT BALANCE.

3.Determine the coefficient of correlation. Interpret.

4.Determine the coefficient of determination. Interpret.

5.Test the utility of this regression model (use a two tail test with =.05). Interpret your results, including the p-value.

6.Based on your findings in 1-5, what is your opinion about using CREDIT BALANCE to predict INCOME? Explain.

7.Compute the 95% confidence interval for beta-1 (the population slope). Interpret this interval.

8.Using an interval, estimate the average income for customers that have credit balances of $4,000. Interpret this interval.

9.Using an interval, predict the income for a customer that has a credit balance of $4,000. Interpret this interval.

10.What can we say about the income for a customer that has a credit balance of $10,000? Explain your answer.

In an attempt to improve the model, we decide to do a multiple regression analysis predicting INCOME based on CREDIT BALANCE, SIZE and YEARS.

11.Using MINITAB run the multiple regression analysis using the variables CREDIT BALANCE, SIZE and YEARS to predict INCOME. State the equation for this multiple regression model.

12.Perform the Global Test for Utility (F-Test). Explain your conclusion.

13.Perform the t-test on each independent variable. Explain your conclusions and clearly state how you should proceed. In particular, which independent variables should we keep and which should be discarded. If appropriate, re-run the multiple regression using only the significant independent variables and the dependent variable. Include your output and interpret it.

14.Is this multiple regression model better than the linear model that we generated in parts 1-10? Explain.

15.All DeVry University policies are in effect, including the plagiarism policy.

16.Project Part C report is due by the end of Week 7.

17.Project Part C is worth 100 total points. See grading rubric below.

Summarize your results from 1-14

Data:

Location Income ($1000) Size Years Credit Balance($)

Urban 27 1 2 2631

Rural 25 4 2 2047

Suburban 25 1 1 3155

Suburban 26 1 2 3913

Rural 30 5 5 2660

Urban 29 1 3 3531

Rural 33 6 10 2766

Urban 30 1 4 3769

Suburban 32 2 4 4082

Urban 34 1 6 3806

Urban 35 1 8 4049

Urban 40 1 9 4073

Rural 30 6 9 2697

Rural 33 6 11 2914

Urban 42 2 10 4073

Suburban 32 2 4 4310

Urban 43 2 10 4199

Urban 43 2 10 4253

Rural 33 7 13 3104

Urban 47 2 10 4293

Subu rban 35 3 5 4456

Urban 54 2 11 4340

Suburban 42 3 5 4925

Rural 36 7 13 3178

Urban 57 3 11 4391

Suburban 44 3 6 4947

Rural 38 7 15 3203

Urban 54 3 8 4354

Urban 54 3 10 4366

Suburban 46 4 6 5003

Rural 40 7 15 3250

Urban 60 4 11 4402

Urban 58 4 10 4397

Urban 61 5 13 4595

Urban 61 5 13 4786

Urban 62 6 14 4888

Suburban 49 5 8 5148

Urban 68 6 14 5011

Suburban 57 6 8 5220

Rural 45 8 16 3257

Urban 71 7 15 5528

Suburban 57 7 9 5283

Suburban 64 8 9 5332

Rural 45 8 17 3304

Urban 74 7 19 5553

Suburban 65 8 10 5484

Rural 47 8 18 3342

Rural 53 8 18 3788

Suburban 66 8 10 5756

Suburban 69 8 10 5861