Question: May Brothers Department Store has conducted a survey to learn the buying intentions of a sample of 62 department store customers. The survey asked each customer their household gross income (in thousands of $'s), the number of people living in the household, and the number of shopping trips they take per year. The regression results follow (with t-statistics in parenthesis):
TRIP = 0.5 + 0.1 INCOME + 2.0 FAMILY
(1.6) (2.5) (1.5)
R-squared = .85 F-Stat = 120.4 n = 62
Should you include both INCOME and FAMILY in the model, why? If an individual makes $30,000 a year and 4 people live in the household how many trips does your model estimate they will take?