Math Problem Statement

The owner of a new pizzeria in town wants to study the relationship between weekly revenue and advertising expenditures. All measures are recorded in thousands of dollars. The summary output for the regression model is given below: What is the coefficient of determination (R^2)? Round your answer to four decimal places.

Solution

To find the coefficient of determination R2R^2, we use the following formula:

R2=SSregressionSStotalR^2 = \frac{\text{SS}_{\text{regression}}}{\text{SS}_{\text{total}}}

From the table:

  • SSregression=19.7412358\text{SS}_{\text{regression}} = 19.7412358
  • SStotal=21.95573617\text{SS}_{\text{total}} = 21.95573617

Now, let's calculate R2R^2:

R2=19.741235821.955736170.8993R^2 = \frac{19.7412358}{21.95573617} \approx 0.8993

Thus, the coefficient of determination R2R^2 is approximately 0.8993 (rounded to four decimal places).

Would you like more details or have any questions?

Here are 5 related questions:

  1. What does a high R2R^2 value indicate about the model fit?
  2. How do you interpret the significance FF-value in this context?
  3. How does the MSMS value relate to the FF-statistic?
  4. Why is it important to check both R2R^2 and FF-value in regression?
  5. How would you compute adjusted R2R^2?

Tip: R2R^2 values closer to 1 indicate a strong fit between the model and the data, meaning the model explains most of the variation in the dependent variable.

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Math Problem Analysis

Mathematical Concepts

Regression Analysis
ANOVA
Coefficient of Determination

Formulas

R^2 = SS_regression / SS_total

Theorems

Sum of Squares in ANOVA

Suitable Grade Level

Undergraduate Statistics