Neas-Seminars

A illustrative example for dummy variable regression in excel would be helpful.


http://33771.hs2.instantasp.net/Topic11171.aspx

By noj_adohr - 12/10/2011 11:18:34 AM

For someone who has never used the regression function in excel and illustrative example would be helpful. How do we list the data? What does the output look like? Anything would be helpful. Pointing to Module 14 HW feed is not helpful. Thanks.

[NEAS: Suppose one regresses personal auto claim frequency on miles driven: Y (claim frequency) = alpha + beta × X (miles driven) + epsilon. Claim frequency also depends on urban vs rural drivers, so one might use a dummy variable D, which is 0 for urban drivers and 1 for rural drivers (or vice versa). If just the intercept (alpha) differs for urban vs rural drivers, the explanatory variables are D and X. If the slope (beta) also differs for urban vs rural drivers, the explanatory variables are D, X, and D × X.]