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■ Hypotheses
H 0: β 1 = 0
H a: β 1 ≠ 0
■ Test Statistic
b1 s
t= where sb1 =
sb1 Σ(xi − x)
2
■ Rejection Rule
where:
tα/ 2 is based on a t distribution
with n - 2 degrees of freedom
b1
3. Select the test statistic.t =
sb1
■ Rejection Rule
Reject H0 if 0 is not included in
the confidence interval for β 1.
■ 95% Confidence Interval for β 1
b1 ± tα / 2=sb15 +/- 3.182(1.08) = 5 +/- 3.44
or 1.56 to 8.44
■ Conclusion
0 is not included in the confidence interval.
Reject H0
■ Hypotheses
H 0: β 1 = 0
H a: β 1 ≠ 0
■ Test Statistic
F = MSR/MSE
■ Rejection Rule
Reject H0 if
p-value < α
or F > Fα
where:
Fα is based on an F distribution with
1 degree of freedom in the numerator and
n - 2 degrees of freedom in the denominator
α
2. Specify the level of significance. = .05
yp ± tα / 2sind
where:
confidence coefficient is 1 - α and
tα /2 is based on a t distribution
with n - 2 degrees of freedom
■ yˆpof
Estimate of the Standard Deviation
1 (xp − x)2
syˆp = s +
n ∑ (xi − x)2
1 (3− 2)2
syˆp = 2.16025 +
5 (1− 2)2 + (3− 2)2 + (2 − 2)2 + (1− 2)2 + (3− 2)2
1 1
syˆp = 2.16025 + = 1.4491
5 4
25 + 3.1824(1.4491)
25 + 4.61
sind = s 1+ +
n ∑ (xi − x)2
1 1
syˆp = 2.16025 1+ +
5 4
syˆp = 2.16025(1.20416) = 2.6013
yp ± tα / 2sind
25 + 3.1824(2.6013)
25 + 8.28
yi − yˆi
y − yˆ
Good Pattern
Residual
y − yˆ
Nonconstant Variance
Residual
y − yˆ
Model Form Not Adequate
Residual
■ Residuals
Observation Predicted Cars Sold Residuals
1 15 -1
2 25 -1
3 20 -2
4 15 2
5 25 2
1
0
-1
-2
-3
0 1 2 3 4
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