Consider the following linear regression model:
a) What does y and x_{1}, x_{2}, . . . . x_{k} represent?
b) What does β_{o}, β_{1}, β_{2}, . . . . β_{k} represent?
c) What does the error term € describe?
The shares of the U.S automobile market held in 1990 General Motors, Japanese manufacturers, Ford, Chrysler and other manufacturers were, respectively 36%, 26%, 21%, 9%, and 8%. Suppose that a new survey of 1,000 new-car buyers shows the following purchase frequencies:
GM (391, Japanese (202), Ford (275), Chrysler (53), Other (79)
a) Show that it is appropriate to carry out a chi-square test using these data.
b) Test to determine whether the new car market shares differ from those of 1990. Use α = 0.05.