Statistics for Business: Decision Making and Analysis, 3rd Edition

... increase.

residual degrees of freedom

The sample size minus the number of estimates in the regression equation; n - k - 1.

What Do You Think?

1. A government watchdog developed a multiple regression model. The response is the total travel expenses (in dollars) for the staff of various government offices for the most recent three months. Explanatory variables include components of the total budget for each office and the size and composition of the staff in each office. The model was fit to data for n = 74 offices reported in the most recent quarter and produced R² = 0.62 with s_e = 17,653.

   1. Give two interpretations of the reported value of R².⁵

      ⁵ The regression captures 62% of variation in travel expenses; the square of the correlation between estimated ...