Bill wants to write the equation that demonstrates the model for explaining quarter-life crisis. He is using optimism, locus of control, income, and years since completing college as explanatory variables. Which of the following equations is most appropriate?
Answer
= a + b1X1 + b2X2 + 3X3 + 4X4
Y = 0 + 1Xi
Yi = 0 + 1X1 + 2X2 + 3X3 + 4X4 + ei
= a + bXi
Online "^" is used to indicate exponents, e.g., x^2 = x squared.
Without know what the letters indicate, it is impossible to respond adequately.
The most appropriate equation is:
Yi = 0 + 1X1 + 2X2 + 3X3 + 4X4 + ei
This equation includes all the explanatory variables (optimism, locus of control, income, and years since completing college) represented by X1, X2, X3, and X4 respectively. The coefficients 1, 2, 3, and 4 (b1, b2, b3, and b4) represent the effect that each variable has on the outcome variable Y. The constant term 0 (a) represents the intercept of the equation.
So, this equation allows Bill to estimate the impact of each explanatory variable on the outcome variable Y (quarter-life crisis) by plugging in appropriate values for X1, X2, X3, and X4 into the equation and solving for Yi.