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Online clothes II. For the online clothing retailer discussed in the previous problem, the scatterplot of Total Yearly Purchases by Income shows
The correlation between Total Yearly Purchases and Income is 0.722. Summary statistics for the two variables are:
Mean
SD
Income
$50,343.40
$16,952.50
Total yearly purchase
$572.52
$253.62
a) What is the linear regression equation for predicting Total Yearly Purchase from Income?
b) Do the assumptions and conditions for regression appear to be met?
c) What is the predicted average Total Yearly Purchase for someone with a yearly Income of $20,000? For someone with an annual Income of $80,000?
d) What percent of the variability in Total Yearly Purchases is accounted for by this model?
e) Do you think the regression might be a useful one for the company? Comment.
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