Question

The regression analysis was rerun below dropping variables X4,  X5, and X6.

Term	Coef	SE Coef	T-Value
Constant	-5.1	14.7	-0.35
X 1	12.44	2.32	5.36
X 3	6.41	1.70	3.76
X 7	0.0979	0.0510	1.92
X 9	-0.0263	0.0146	-1.80

Use the t test at the 0.05 level of significance to determine the significance of each independent variable.

• What is the value of the T Critical Point?               How many degrees of freedom?

• Would you eliminate any variable from the model?          

• If YES, which?

Answer 1

Degree of freedom = n - k - 1 (where k is number of predictor variables in the model)

= 50 - 4 - 1 = 45

T critical point for 0.05 level of significance and df = 45 is 2.014

The independent variables are significant for which T-value < -2.014 or T-value > 2.014

T-value of X1 and X3 are greater than 2.014. Thus the variable X1 and X3 are significant variables in the model.

T-value of X7 and X9 are lie between -2.014 and 2.014. Thus the variable X7 and X9 are non-significant variables in the model.