Q. 4.91 - Elementary Statistics

Question

a. compute the three sums of squares, $SST,SSR,SSE$, using the defining formulas

b. verify the regression identity, $SST=SSR+SSE$

c. compute the coefficient of determination.

d. determine the percentage of variation in the observed values of the response variable that is required by the regression

e. State how useful the regression equation appears to be for making predictions.

Step-by-Step Solution

Answer

(a) $$\begin{gathered} SST=26 \\ SSR=20 \\ SSE=6 \end{gathered}$$

(b) The regression identity is verified

(c) $0.7692$

(d) $72.96\%$

(e) Utilising the regression equation to create predictions is beneficial, as the regression can explain more than $95\%$of the variation.

Part (a) Step 1: Given information

The given data is 

Part (a) Step 2: Explanation

The regression equation is 

$\hat{y}=-3+2 x$

Formulas to calculate the sum of squares is 

$$\begin{gathered} SST=\sum {\left(y_i-\overline{y}\right)}^2 \\ SSR=\sum {\left({\hat{y}}_i-\overline{y}\right)}^2 \\ SSE=\sum {\left(y_i-\hat{y}\right)}^2 \end{gathered}$$

As shown in the table below, the relevant sums can be determined.$$\begin{gathered} SST=26 \\ SSR=20 \\ SSE=6 \end{gathered}$$

Part (b) Step 1: Given information

The given data is 

Part (b) Step 2: Explanation

From the above answer

$SST=SSR+SSE$

         $$\begin{gathered} =20+6 \\ =26 \end{gathered}$$

Part (c) Step 1: Given information

The given data is 

Part (c) Step 2: Explanation

The formula for the coefficient of determination  is 

$r^2=\frac{SSR}{SST}$

    $$\begin{gathered} =\frac{20}{26} \\ =0.7692 \end{gathered}$$

Part (d) Step 1: Given information

The given data is 

Part (d) Step 2: Explanation

The coefficient of determination restated as a percentage is the percentage of variation:

$0.7692=76.92\%$.

Part (e) Step 1: Given information

The given data is 

Part (e) Step 2: Explanation

The regression equation can be used to make predictions if the estimated r is close to $1$.

The computed $r^2=0.7692$, which means it is near to $1$.

As a result, utilising the regression equation to create predictions is beneficial, as the regression can explain more than $75\%$ of the variation.