Refer to the Lincolnville School District bus data. First, add a variable to change the type of engine (diesel or gasoline) to a qualitative variable. If the engine type is diesel, then set the qualitative variable to 0. If the engine type is gasoline, then set the qualitative variable to 1. Develop a regression equation using statistical software with maintenance cost as the dependent variable and age, odometer miles, miles since last maintenance, and engine type as the independent variables.

Click here for the Excel Data File

a-1. Develop a correlation matrix. (Negative amounts should be indicated by a minus sign. Round your answers to 6 decimal places.)



a-2. Which independent variables are strongly correlated?



a-3. Do you see any problems with multicollinearity?

multiple choice 1
Yes
No


a-4. Using a statistical software package, determine the regression equation using Age as the independent variable. Report the R2.






a-5. Because maintenance costs are likely to vary based on engine type (gasoline or diesel), add the variable “engine type” to the regression analysis. Report the regression analysis with age and engine type. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)



a-6. Interpret the coefficient of “engine type”.