Analysis of Environment Canada's Fuel Economy and Fortune 100 List Data

Environment Canada's Fuel Economy Guide Data

QUESTIONS1. Environment Canada’s Fuel Economy Guide provides fuel efficiency data for 2020model year cars and trucks. The Fuel Efficiency data for 500 cars is attached. The columnlabeled Manufacturer shows the name of the company that manufactured the car; the columnlabeled Displacement shows the engine’s displacement in liters; the column labeled Fuel showsthe required or recommended type of fuel (regular or premium gasoline); the column labeledDrive identifies the type of drive (F for front wheel, R for rear wheel, and A for all wheel); andthe column labeled Hwy MPG shows the fuel efficiency rating for highway driving in terms ofmiles per gallon. Analyzing Environment Canada’s Fuel Economy Guide data, write a briefingreport that will help the trade department decide on import quota restrictions that may takeeither fixed in terms of value or quantity of the cars which can be imported over the comingdecades.In your report, include: Estimated regression equation that you would recommend to predictthe fuel efficiency for highway driving given the engine’s displacement, the dummy variableFuelPremium, and the dummy variables FrontWheel and RearWheel; an interpretation of theestimated regression coefficients for this equation and test for overall significance and individualsignificance atα= 0.05 and discussion of your findings and conclusions.2. (25 points)Fortune magazine publishes an annual list of the 100 best companies to work for.The data is provided in the file named FortuneBest and it shows a portion of the data for arandom sample of 30 of the companies that made the top 100 list for 2020. The column labeledRank shows the rank of the company in the Fortune 100 list; the column labeled Size indicateswhether the company is a small, midsize, or large company; the column labeled Salaried ($1000s)shows the average annual salary for salaried employees rounded to the nearest $1000; and thecolumn labeled Hourly ($1000s) shows the average annual salary for hourly employees roundedto the nearest $1000. Fortune defines large companies as having more than 10,000 employees,midsize companies as having between 2500 and 10,000 employees, and small companies ashaving fewer than 2500 employees.
a.Use methods of descriptive statistics to summarize the FortuneBest data and comment onyour findings.b.Based upon the results of your analysis, what estimated regression equation would yourecommend to predict the average annual salary for salaried employees given the averageannual salary for hourly employees and the size of the company. Provide an interpretationof the estimated regression coefficients for this equation.c.Determine the significance of the independent variables..  Discuss the need for otherindependent variables that could be added to the model. What additional variable/s mightbe helpful?3.When trying to decide what car to buy, real value is not necessarily determinedby how much you spend on the initial purchase. Instead, cars that are reliable and don’t costmuch to own often represent the best values. But no matter how reliable or inexpensive a carmay cost to own, it must also perform well.To measure value, Consumer Reports developed a statistic referred to as a value score. Thevalue score is based upon five-year owner costs, overall road-test scores, and predicted-reliabilityratings. Five-year owner costs are based upon the expenses incurred in the first five years ofownership, including depreciation, fuel, maintenance and repairs, and so on. Using a nationalaverage of 12,000 miles per year, an average cost per mile driven is used as the measure offive-year owner costs. Road-test scores are the results of more than 50 tests and evaluationsand are based on a 100-point scale, with higher scores indicating better performance, comfort,convenience, and fuel economy. The highest road-test score obtained in the tests conductedby Consumer Reports was a 99 for a Lexus LS 460L. Predicted-reliability ratings (1 = Poor, 2= Fair, 3 = Good, 4 = Very Good, and 5 = Excellent) are based upon data from ConsumerReports’ Annual Auto Survey.A car with a value score of 1.0 is considered to be an ‘‘average-value” car. A car with a valuescore of 2.0 is considered to be twice as good a value as a car with a value score of 1.0; a carwith a value score of 0.5 is considered half as good as average; and so on. The data for three
sizes of cars (13 small sedans, 20 family sedans, and 21 upscale sedans), including the price ($)of each car tested, are contained in the file named CarValues. You may use dummy variables toincorporate the effect of size of car[categorical variable with three values]. Your report shouldinclude:a.an estimated regression with Family-Sedan and Upscale-Sedan as the independent variables,and treating Cost/Mile as the dependent variable. Discuss your findings.b.Estimated regression equation using Cost/Mile, Road-Test Score, Predicted Reliability,Family-Sedan, and Upscale-Sedan as the independent variables, and treating Value Scoreas the dependent variable.c.Delete any independent variables that are not significant from the estimated regressionequation developed usingα= 0.05 level of significance. After deleting any independentvariables that are not significant, develop a new estimated regression equation.d.Suppose someone claims that ‘‘smaller cars provide better values than larger cars.” Forthe data in this case, the Small Sedans represent the smallest type of car and the UpscaleSedans represent the largest type of car. Does your analysis support this claim?e.Develop an estimated regression equation that could be used to predict the value scoregiven the value of the Road-Test Score and the Predicted Reliability. What conclusionscan you derive from your analysis?