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Inference and Statistical Significance (1) Inferences about the population mean Population mean
Inference and Statistical Significance (2) Inferences about the difference Difference between two population means
between two population means
Inference and Statistical Significance (3) Inferences about the population The significance of linear regression Coefficients
regression coefficients
Inference and Statistical Significance (4) Inferences about the association Chi squared statistic
between categorical variables
The Chi Squared Statistic
Inference and Statistical Significance (5) Inferences about the population Regression
regression coefficients
CONTENTS Population mean
We should also note that in F26 under the heading Significance F, Excel has calculated the value to be
0.00000035307. This very small probability measures the chances that the true population value of
R squared is in fact zero. We conclude that it is very unlikely and so can be fairly certain that the
calculated R squared value of 0.93856 is significantly different from zero.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.97
R Square 0.94
Adjusted R Square 0.92
Standard Error 1030.04
Observations 12
ANOVA
df SS MS F Significance F
Regression 2 145881218.66 ### 68.75 0
Residual 9 9548781.34 1060975.7
Total 11 155430000
The positive coefficients for PR and PP indicate that they are substitutes for
strawberries - if PR or PP increases (decreases) the demand for strawberries
SUMMARY OUTPUT will increase (decrease). Since the coefficient of PR exceeds that for PP then
raspberries are a closer substitute than peaches.
Regression Statistics
Multiple R 0.84 The negative coefficients for PIC and PC indicate that they are complements for
R Square 0.7 strawberries - if PIC or PC increases (decreases) the demand for strawberries
Adjusted R Square 0.63 will decrease (increase). Since the coefficient of PIC exceeds that for PC then
Standard Error 24.55 ice cream is more closely tied to strawberry sales than cream.
Observations 30
Overall the regression is far from
ANOVA robust. Although the R squared is quite
df SS MS F Significance F high (69.7%) and significantly different
Regression 5 33309.52 6661.9 11.06 0 from zero, the fact that only two out of the
Residual 24 14461.14 602.55 five variable coefficients are significant
Total 29 47770.65 means that the model is unlikely to perform
well for prediction purposes.
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% The highly significant intercept term
Intercept 5958.66 117.67 50.64 0 5715.81 6201.51 confirms this since it does not refer to
PS -95.95 68.72 -1.4 0.18 -237.79 45.88 an explanatory variable.
PR 63.89 15.69 4.07 0 31.52 96.27 Finally the fact that the coefficient
PP 12.37 17.87 0.69 0.5 -24.5 49.25 for the price of strawberries themselves
PIC -79.39 15.52 -5.12 0 -111.43 -47.36 is not significant should give us cause
PC -30.68 20.18 -1.52 0.14 -72.32 10.96 for concern.
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