Using advertised prices for used Ford Escorts a linear model for the relationship between a car's age and its price is found. The correlation coefficient is - 0.933
Determine R2 and interpret this statistic.
A) R2 = 93.3% which means that 93.3% of the variation in car price is explained by the age of the car.
B) R2 = 87.1% which means that 87.1% of the variation in car price is explained by the age of the car.
C) R2 = 93.3% which means that 93.3% of the variation in the age of the car is explained by the price of the car.
D) R2 = 87.1% which means that 87.1% of the variation in the age of the car is explained by the price of the car.
E) None of these are correct.
Is the answer C?
No, the answer is not C. To determine R2, we need to square the correlation coefficient (-0.933) to get the proportion of the variation in car price that is explained by the age of the car.
R2 = (-0.933)^2 = 0.870489
So the correct interpretation is:
B) R2 = 87.1%, which means that 87.1% of the variation in car price is explained by the age of the car.
Therefore, the correct answer is B.
No, the answer is actually E) None of these are correct.
The R2 statistic represents the proportion of the variance in the dependent variable (in this case, car price) that can be explained by the independent variable (age of the car) in the linear model.
However, the given information does not provide the specific value of R2.