This work is part of my effort to become a well versed data analyst. At this point in time, and for the immediate future, I will undoubtedly be a novice at using R and solving the problem sets from this book. Hence, my solutions will at times reflect my limited abilities. But, with more practice, the quality and depth of my work will improve ( That is the whole point!). I welcome you to comment and critic my work to help me improve
This question should be answered using the Carseats data set.
Question-a
Fit a multiple regression model to predict Sales using Price, Urban, and US.
library("ISLR")
?Carseats
head(Carseats)## Sales CompPrice Income Advertising Population Price ShelveLoc Age
## 1 9.50 138 73 11 276 120 Bad 42
## 2 11.22 111 48 16 260 83 Good 65
## 3 10.06 113 35 10 269 80 Medium 59
## 4 7.40 117 100 4 466 97 Medium 55
## 5 4.15 141 64 3 340 128 Bad 38
## 6 10.81 124 113 13 501 72 Bad 78
## Education Urban US
## 1 17 Yes Yes
## 2 10 Yes Yes
## 3 12 Yes Yes
## 4 14 Yes Yes
## 5 13 Yes No
## 6 16 No Yesstr(Carseats)## 'data.frame': 400 obs. of 11 variables:
## $ Sales : num 9.5 11.22 10.06 7.4 4.15 ...
## $ CompPrice : num 138 111 113 117 141 124 115 136 132 132 ...
## $ Income : num 73 48 35 100 64 113 105 81 110 113 ...
## $ Advertising: num 11 16 10 4 3 13 0 15 0 0 ...
## $ Population : num 276 260 269 466 340 501 45 425 108 131 ...
## $ Price : num 120 83 80 97 128 72 108 120 124 124 ...
## $ ShelveLoc : Factor w/ 3 levels "Bad","Good","Medium": 1 2 3 3 1 1 3 2 3 3 ...
## $ Age : num 42 65 59 55 38 78 71 67 76 76 ...
## $ Education : num 17 10 12 14 13 16 15 10 10 17 ...
## $ Urban : Factor w/ 2 levels "No","Yes": 2 2 2 2 2 1 2 2 1 1 ...
## $ US : Factor w/ 2 levels "No","Yes": 2 2 2 2 1 2 1 2 1 2 ...lm.fit = lm(Sales ~ Price+Urban+US, data= Carseats)
summary(lm.fit)##
## Call:
## lm(formula = Sales ~ Price + Urban + US, data = Carseats)
##
## Residuals:
## Min 1Q Median 3Q Max
## -6.9206 -1.6220 -0.0564 1.5786 7.0581
##
## Coefficients:
## Estimate Std. Error t value Pr(>|t|)
## (Intercept) 13.043469 0.651012 20.036 < 2e-16 ***
## Price -0.054459 0.005242 -10.389 < 2e-16 ***
## UrbanYes -0.021916 0.271650 -0.081 0.936
## USYes 1.200573 0.259042 4.635 4.86e-06 ***
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
##
## Residual standard error: 2.472 on 396 degrees of freedom
## Multiple R-squared: 0.2393, Adjusted R-squared: 0.2335
## F-statistic: 41.52 on 3 and 396 DF, p-value: < 2.2e-16Question-b
Provide an interpretation of each coefficient in the model. Be careful—some of the variables in the model are qualitative!
When price increases by $1000 and other predictors are held constant, sales decrease by 54.459 unit sales. In otherwords, when price increases by $1000, the number of carseats sold decrease by 54,459.
A store’s sale is not affected by whether or not it is in a Urban area.
A store in the US sales 1200 more carseats (in average) than a store that is abroad.
Question-c
Write out the model in equation form, being careful to handle the qualitative variables properly.
Skipped.
Question-d
For which of the predictors can you reject the null hypothesis Ho : βj = 0?
The predictor ‘Urban’. Its p-value is not statistically significant with a value of 0.936.
Question-e
On the basis of your response to the previous question, fit a smaller model that only uses the predictors for which there is evidence of association with the outcome.
lm.fit2 = lm(Sales ~ Price+US, data= Carseats)
summary(lm.fit2)##
## Call:
## lm(formula = Sales ~ Price + US, data = Carseats)
##
## Residuals:
## Min 1Q Median 3Q Max
## -6.9269 -1.6286 -0.0574 1.5766 7.0515
##
## Coefficients:
## Estimate Std. Error t value Pr(>|t|)
## (Intercept) 13.03079 0.63098 20.652 < 2e-16 ***
## Price -0.05448 0.00523 -10.416 < 2e-16 ***
## USYes 1.19964 0.25846 4.641 4.71e-06 ***
## ---
## Signif. codes: 0 '***' 0.001 '**' 0.01 '*' 0.05 '.' 0.1 ' ' 1
##
## Residual standard error: 2.469 on 397 degrees of freedom
## Multiple R-squared: 0.2393, Adjusted R-squared: 0.2354
## F-statistic: 62.43 on 2 and 397 DF, p-value: < 2.2e-16Question-f
How well do the models in (a) and (e) fit the data?
Based on their respective R-square values(in summary tables), these two models are mediocre (only 24% change in response explained).
Question-g
Using the model from (e), obtain 95 % confidence intervals for the coefficient(s)
confint(lm.fit2)## 2.5 % 97.5 %
## (Intercept) 11.79032020 14.27126531
## Price -0.06475984 -0.04419543
## USYes 0.69151957 1.70776632Question-h
Is there evidence of outliers or high leverage observations in the model from (e)?
par(mfrow=c(2,2))
plot(lm.fit2)
Based on the Normal.q-q pot and the Residuals vs Leverage plot, there are no evidence of such points.
Ahmed TADDE