Question

Consider the following regression equation:

^Time = 0.48 +0.384 MILES + 0.810 DELIV + 0.895 TYPE

TIME - travel time in hours

MILES - miles traveled

DELIV - number of deliveries

TYPE = 0 if the truck used is a semi

TYPE = 1 if the truck used is a van

a) Interpret the coefficient of the dummy variable TYPE.

Answer 1

^Time = 0.48 +0.384 MILES + 0.810 DELIV + 0.895 TYPE

TYPE = 0 if the truck used is a semi

TYPE = 1 if the truck used is a van

A)

Coefficient of TYPE = 0.895

it says that if truck used is a van , and keeping other variables as constant, then value of TIME will increase by 0.895

EQUATION WILL BE :

^Time = 0.48 +0.384 MILES + 0.810 DELIV + 0.895*1

if truck used is a semi, then value of TIME will do not depend on TYPE

EQuation will be :

^Time = 0.48 +0.384 MILES + 0.810 DELIV

.....................

Please revert back in case of any doubt.

Please upvote. Thanks in advance.