Question

Following is an extract from the database of a construction company. The table shows the height of walls in feet and the cost of raising them. The estimated simple linear regression equation is given as Ŷ = b0 + b1X. (Hint: Use Excel functions).

Height (ft)	Cost ($)
4	670
3	430
7	810
9	1100
6	790
8	880
5	760
11	1200

What is the value of the coefficient b0?

Answer 1

Output of regression analysis in excel is

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.963665
R Square	0.928651
Adjusted R Square	0.916759
Standard Error	69.38084
Observations	8
ANOVA
	df	SS	MS	F	Significance F
Regression	1	375917.8	375917.8	78.0933	0.000117
Residual	6	28882.21	4813.701
Total	7	404800
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	254.8371	69.55451	3.663847	0.010531	84.64334	425.0308	84.64334	425.0308
Height	86.81704	9.82422	8.837041	0.000117	62.77804	110.856	62.77804	110.856

Hence value of b0 = 254.8371