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An art collector is studying the relationship between the selling price of a painting and two independent variables. The two independent variables are the number of bidders at the particular auction and the age of the painting, in years. A sample of 25 paintings revealed the following sample information.
a. Develop a multiple regression equation using the independent variables number of bidders and age of painting to estimate the dependent variable auction price. Discuss the equation. Does it surprise you that there is an inverse relationship between the number of bidders and the price of the painting?
b. Create an interaction variable and include it in the regression equation. Explain the meaning of the interaction. Is this variable significant?
c. Use the stepwise method and the independent variables for the number of bidders, the age of the painting, and the interaction between the number of bidders and the age of the painting. Which variables would youselect? |
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