Carefully interpret the coefficient of determination


Use the "FuelData" Excel file and Answer the following questions:

1. Develop an estimated regression equation that can be used to predict the fuel efficiency for highway driving given the engine's displacement, fuel type, and car size. {Hint: Use the COMPACT class as a reference category. Use the REGULAR fuel type as a reference category. Use the =IF function in Excel to create dummy variables: =IF(logical_test, [value_if_true], [value_if_false]). The IF function returns one value if a condition you specify evaluates to TRUE, and another value if that condition evaluates to FALSE. For example, the formula =IF(B2="midsize",1,0) returns 1 if B2 is "midsize", and 0 if B2 is not "midsize".}

2. Using the Excel results:

a. Carefully interpret the coefficient of determination (r-square);

b. Carefully interpret all the coefficients (b's) in the estimated regression equation.

Attachment:- Fuel_Data_Excel_file.xlsx

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Basic Statistics: Carefully interpret the coefficient of determination
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