The Mountain Bike data file on the text CD shows selling prices for mountain bikes

QUESTION:

The Mountain Bike data file on the text CD shows selling prices for mountain bikes. When y = mountain bike price ($) is regressed on x1 = weight of bike (lbs) and x2 = the type of suspension (0 = full, 1 = front end), ŷ = 2741.62 – 53.752x1 – 643.595x2.

a. Interpret the estimated effect of the weight of the bike.

b. Interpret the estimated effect of the type of suspension on the mountain bike.


ANSWER:

a. For each one-pound increase in weight, the predicted price decreases by $53.75 for the same type of suspension.

b. For a given weight, the predicted price for a front end suspension bike is $643.59 less than for a full-suspension bike.

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