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Answer:

In this assignment, we compute the consumer characteristics to predict the amount charged by the users of credit card. The data for Consumer information is given below: -

Income ($1000s)

Household Size

Amount Charged ($)

Income ($1000s)

Household Size

Amount Charged ($)

54

3

4016

54

6

5573

30

2

3159

30

1

2583

32

4

5100

48

2

3866

50

5

4742

34

5

3586

31

2

1864

67

4

5037

55

2

4070

50

2

3605

37

1

2731

67

5

5345

40

2

3348

55

6

5370

66

4

4764

52

2

3890

51

3

4110

62

3

4705

25

3

4208

64

2

4157

48

4

4219

22

3

3579

27

1

2477

29

4

3890

33

2

2514

39

2

2972

65

3

4214

35

1

3121

63

4

4965

39

4

4183

42

6

4412

54

3

3720

21

2

2448

23

6

4127

44

1

2995

27

2

2921

37

5

4171

26

7

4603

62

6

5678

61

2

4273

21

3

3623

30

2

3067

55

7

5301

22

4

3074

42

2

3020

46

5

4820

41

7

4828

66

4

5149

The data comprises of household size, annual income and annual charges of credit card for a sample of 50 consumers. Now we move on to the analysis part: -

The descriptive statistics of the data is given below: 
 

Descriptive statistics

Income ($1000s)

Household Size

Amount Charged ($)

Mean

43.48

3.42

3963.86

Standard Error

2.057785614

0.245930138

132.023387

Median

42

3

4090

Mode

54

2

3890

Standard Deviation

14.55074162

1.738988681

933.5463219

Sample Variance

211.7240816

3.024081633

871508.7351

Kurtosis

-1.247719422

-0.722808552

-0.742482171

Skewness

0.095855639

0.527895977

-0.128860064

Range

46

6

3814

Minimum

21

1

1864

Maximum

67

7

5678

Sum

2174

171

198193

Count

50

50

50

Largest(1)

67

7

5678

Smallest(1)

21

1

1864

Confidence Level (95.0%)

4.135274935

0.494215106

265.3109241


The equation for credit card charges can be given as: -

Yt = βXt + ui  ......Eq(1)

Here Yt is our dependent variable which is annual charges on credit card and Xt is our independent variable which is annual income ($1000s). The regression results are given below: -

SUMMARY OUTPUT

 

 

 

 

 

 

 

Regression Statistics

 

 

 

 

 

 

 

Multiple R

0.630781

 

 

 

 

 

 

 

R Square

0.397884

 

 

 

 

 

 

 

Adjusted R Square

0.38534

 

 

 

 

 

 

 

Standard Error

731.9025

 

 

 

 

 

 

 

Observations

50

 

 

 

 

 

 

 

ANOVA

 

 

 

 

 

 

 

 

 

df

SS

MS

F

Significance F

 

 

Regression

1

16991229

16991229

31.71892

9.1E-07

 

 

 

Residual

48

25712699

535681.2

 

 

 

 

 

Total

49

42703928

 

 

 

 

 

 

 

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept

2204.241

329.134

6.697091

0.00

1542.472

2866.009

1542.472207

2866.0088

Income ($1000s)

40.46963

7.185716

5.631955

0.00

26.02178

54.91748

26.02177931

54.917479

From the regression results, we can say that 38.5% of the variation in annual charges on credit card is explained by the variable annual income (Adjusted R2). The coefficients imply that if there is $1000 (1 unit of the variable annual income) increase in annual income, then there is an increase of 40.47 units in annual credit card charges.

Another equation for credit card charges can be given as: -

Yt = βZt + ui  ......Eq(2)

Here Yt is our dependent variable which is annual charges on credit card and Xt is our independent variable which is household size. The regression results are given below:-

SUMMARY OUTPUT

 

 

 

 

 

 

 

Regression Statistics

 

 

 

 

 

 

 

Multiple R

0.752854

 

 

 

 

 

 

 

R Square

0.566789

 

 

 

 

 

 

 

Adjusted R Square

0.557764

 

 

 

 

 

 

 

Standard Error

620.8163

 

 

 

 

 

 

 

Observations

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANOVA

 

 

 

 

 

 

 

 

 

df

SS

MS

F

Significance F

 

 

Regression

1

24204112

24204112

62.80048

2.86E-10

 

 

 

Residual

48

18499816

385412.8

 

 

 

 

 

Total

49

42703928

 

 

 

 

 

 

 

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept

2581.644

195.2699

13.2209

0.00

2189.028

2974.26

2189.027669

2974.2605

Household Size

404.1567

50.99978

7.924676

0.00

301.6148

506.6986

301.6147764

506.69863

From the regression results, we can say that 55.8% of the variation in annual charges on credit card is explained by the variable household size (Adjusted R2). The coefficients imply that if there is 1 unit increase in the number of household members, then there is an increase of 404.2 units in annual credit card charges.

After viewing the above two variables, we can say that household size is better than annual income in predicting annual credit card charges.

The equation for credit card charges taking both the variables household size and annual income can be given as: -

Yt = β1Xt + β2Zt + ui  .....Eq(3)

The regression results are given below:-

SUMMARY OUTPUT

 

 

 

 

 

 

 

Regression Statistics

 

 

 

 

 

 

 

Multiple R

0.908502

 

 

 

 

 

 

 

R Square

0.825376

 

 

 

 

 

 

 

Adjusted R Square

0.817945

 

 

 

 

 

 

 

Standard Error

398.3249

 

 

 

 

 

 

 

Observations

50

 

 

 

 

 

 

 

ANOVA

 

 

 

 

 

 

 

 

 

df

SS

MS

F

Significance F

 

 

Regression

2

35246779

17623389

111.0745

1.55E-18

 

 

 

Residual

47

7457149

158662.8

 

 

 

 

 

Total

49

42703928

 

 

 

 

 

 

 

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept

1305.034

197.771

6.598712

0.00

907.17

1702.898

907.17

1702.898

Income ($1000s)

33.12196

3.970237

8.342563

0.00

25.13487

41.10904

25.13487

41.10904

Household Size

356.3402

33.2204

10.72655

0.00

289.5094

423.171

289.5094

423.171

From the regression results, we can say that 81.8% of the variation in annual charges on credit card is explained by the variables household size and annual income (Adjusted R2). The coefficients imply that if there is 1 unit increase in the number of household members, then there is an increase of 356.34 units in annual credit card charges whereas if there is $1000 (1 unit of the variable annual income) increase in annual income, then there is an increase of 33.12 units in annual credit card charges.

Hence the fitted regression equation can be given as: -

Yt = 33.12Xt + 356.34Zt

The predicted annual credit card charge for a three-person household with an annual income of $40,000 would be: -

Yt = 33.12*40 + 356.34*3 = $2393.82.

The other factors that affect the annual charges of credit card are interest rate, level of education of the individual and past credit history of the individual. If the interest rate is high, the annual charges will increase proportionately and this would tend the individual to decrease the frequency of credit card usage.

The descriptive statistics of the variables are given below: -

Descriptive Statistics

HI001 FINAL EXAM

HI001 ASSIGNMENT 01

HI001 ASSIGNMENT 02

Mean

31.90909091

17.34343434

15.50505051

Standard Error

0.700162085

0.237298066

0.23564704

Median

32

17

16

Mode

29

18

17

Standard Deviation

6.966524782

2.361085949

2.344658442

Sample Variance

48.53246753

5.57472686

5.497423212

Kurtosis

7.67534849

10.3018632

0.698973651

Skewness

-1.753036803

0.803185137

-0.464616962

Range

50

22

13

Minimum

0

8

8

Maximum

50

30

21

Sum

3159

1717

1535

Count

99

99

99

Largest(1)

50

30

21

Smallest(1)

0

8

8

Confidence Level(95.0%)

1.389448835

0.470910278

0.467633869

 

Descriptive Statistics

HI003 FINAL EXAM

HI003 ASSIGNMENT 01

HI003 ASSIGNMENT 02

Mean

26.23232323

18.31313131

13.60606061

Standard Error

0.861918907

0.408537639

0.187651228

Median

25

19

13

Mode

25

20

13

Standard Deviation

8.57598484

4.064898183

1.867106141

Sample Variance

73.54751598

16.52339724

3.486085343

Kurtosis

0.474751131

1.51303057

3.505251459

Skewness

-0.027305979

-0.236180187

1.121313851

Range

46

20

12

Minimum

4

10

8

Maximum

50

30

20

Sum

2597

1813

1347

Count

99

99

99

Largest(1)

50

30

20

Smallest(1)

4

10

8

Confidence Level(95.0%)

1.710449975

0.810729628

0.372387745

 

Descriptive Statistics

HI002 FINAL EXAM

HI002 ASSIGNMENT 01

HI002 ASSIGNMENT 02

Mean

26.73737374

17.93939394

12.49494949

Standard Error

0.636870612

0.365435664

0.213139666

Median

27

19

13

Mode

27

20

14

Standard Deviation

6.336782578

3.636038947

2.120712902

Sample Variance

40.15481344

13.22077922

4.497423212

Kurtosis

3.924830269

3.372356549

5.049593179

Skewness

-0.312442386

-1.183845155

-1.204878419

Range

50

26

16

Minimum

0

4

4

Maximum

50

30

20

Sum

2647

1776

1237

Count

99

99

99

Largest(1)

50

30

20

Smallest(1)

0

4

4

Confidence Level(95.0%)

1.26384897

0.725195163

0.42296872

The 10 different correlations between the pairs of variables are given below: -

The variables HI003 FINAL EXAM and HI002 FINAL EXAM are positively correlated with a correlation coefficient of 0.207867. The p-value is 0.039 and hence the correlation coefficient is statistically significant. It is a weak correlation.

The variables HI001 FINAL EXAM and HI002 FINAL EXAM are positively correlated with a correlation coefficient of 0.142303. The p-value is 0.1600 and hence the correlation coefficient is statistically insignificant. It is a weak correlation.

The variables HI001 ASSIGNMENT 01 and HI003 ASSIGNMENT 01 are positively correlated with a correlation coefficient of 0.155602. The p-value is 0.1241 and hence the correlation coefficient is statistically insignificant. It is a weak correlation.

The variables HI003 ASSIGNMENT 01 and HI003 ASSIGNMENT 02 are positively correlated with a correlation coefficient of 0.567657. The p-value is 0.000 and hence the correlation coefficient is statistically significant. It is a strong correlation.

The variables HI001 FINAL EXAM and HI003 FINAL EXAM are positively correlated with a correlation coefficient of 0.187035. The p-value is 0.0638 and hence the correlation coefficient is statistically significant. It is a weak correlation.

The variables HI001 ASSIGNMENT 01 and HI001 ASSIGNMENT 02 are positively correlated with a correlation coefficient of 0.648505. The p-value is 0.000 and hence the correlation coefficient is statistically significant. It is a strong correlation.

The variables HI001 ASSIGNMENT 02 and HI002 ASSIGNMENT 02 are positively correlated with a correlation coefficient of 0.035405. The p-value is 0.7279 and hence the correlation coefficient is statistically insignificant. It is a weak correlation.

The variables HI002 ASSIGNMENT 01 and HI002 ASSIGNMENT 02 are positively correlated with a correlation coefficient of 0.603392. The p-value is 0.000 and hence the correlation coefficient is statistically significant. It is a strong correlation.

The variables HI002 ASSIGNMENT 01 and HI003 ASSIGNMENT 01 are negatively correlated with a correlation coefficient of -0.11055. The p-value is 0.2760 and hence the correlation coefficient is statistically insignificant. It is a weak correlation.

The variables HI003 ASSIGNMENT 02 and HI002 ASSIGNMENT 02 are positively correlated with a correlation coefficient of 0.031706. The p-value is 0.7554 and hence the correlation coefficient is statistically insignificant. It is a weak correlation.

The Descriptive Statistics of the first group (Med 1) is given below: -

Descriptive Statistics

Florida

New York

North Carolina

Mean

5.55

8

7.05

Standard Error

0.478347

0.492041932

0.634428877

Median

6

8

7.5

Mode

7

8

8

Standard Deviation

2.139233

2.200478417

2.837252192

Sample Variance

4.576316

4.842105263

8.05

Kurtosis

-1.06219

0.626431669

-0.904925496

Skewness

-0.27356

0.625687389

-0.056188269

Range

7

9

9

Minimum

2

4

3

Maximum

9

13

12

Sum

111

160

141

Count

20

20

20

Largest(1)

9

13

12

Smallest(1)

2

4

3

Confidence Level(95.0%)

1.001192

1.029855598

1.327874898

The Descriptive Statistics of the second group (Med 2) is given below: -

Descriptive Statistics

Florida

New York

North Carolina

Mean

14.5

15.25

13.95

Standard Error

0.708965146

0.923024

0.65884668

Median

14.5

14.5

14

Mode

17

14

12

Standard Deviation

3.170588522

4.12789

2.946451925

Sample Variance

10.05263158

17.03947

8.681578947

Kurtosis

-0.340799481

-0.03014

-0.592052134

Skewness

0.280721497

0.525352

-0.041733773

Range

12

15

11

Minimum

9

9

8

Maximum

21

24

19

Sum

290

305

279

Count

20

20

20

Largest(1)

21

24

19

Smallest(1)

9

9

8

Confidence Level (95.0%)

1.483881102

1.931912

1.378981946

By viewing the descriptive statistics, we can say that the depression scores of the healthy group is far less than that of the group suffering from chronic health condition such as arthritis, hypertension, and/or heart ailment. We can also say that according to the sample, the individuals from Florida possess far better health conditions than individuals from New York and North Carolina.

Here the hypothesis that needs to be tested is whether there is a significant difference in the depression scores among various regions. The ANOVA test for both the groups are given below: -

For Med 1: -

Anova: Single Factor

 

 

 

 

 

SUMMARY

 

 

 

 

 

 

Groups

Count

Sum

Average

Variance

 

 

Florida

20

111

5.55

4.576316

 

 

New York

20

160

8

4.842105

 

 

North Carolina

20

141

7.05

8.05

 

 

ANOVA

 

 

 

 

 

 

Source of Variation

SS

df

MS

F

P-value

F crit

Between Groups

61.03333

2

30.51667

5.240886

0.00814

3.158843

Within Groups

331.9

57

5.822807

 

 

 

Total

392.9333

59

 

 

 

 

In this case the F value is higher than the F critical value. So we reject the null hypothesis and state that there is significant difference in depression scores among the healthy individuals.

For Med 2: -

Anova: Single Factor

 

 

 

 

 

SUMMARY

 

 

 

 

 

 

Groups

Count

Sum

Average

Variance

 

 

Florida

20

290

14.5

10.05263

 

 

New York

20

305

15.25

17.03947

 

 

North Carolina

20

279

13.95

8.681579

 

 

ANOVA

 

 

 

 

 

 

Source of Variation

SS

df

MS

F

P-value

F crit

Between Groups

17.03333

2

8.516667

0.714212

0.493906

3.158843

Within Groups

679.7

57

11.92456

 

 

 

Total

696.7333

59

 

 

 

 

In this case the F value is lower than the F critical value. So we accept the null hypothesis and state that there is no significant difference in depression scores among the non-healthy individuals.

According to me, the best way to treat depression is to arrange for a good setup of counselling. This cannot be cured in the short run and hence requires time to develop. We also need to see to the health conditions of the individuals for controlling their depression scores.
References

Field, A. (2012). Discovering statistics using SPSS (and sex and drugs and rock 'n' roll). 1st ed. Los Angeles [Calif.]: SAGE. 

Hastie, T., Friedman, J. and Tibshirani, R. (2013). The elements of statistical learning. 1st ed. New York [u.a.]: Springer.

Huff, D. and Geis, I. (2006). How to lie with statistics. 1st ed. New York: W.W. Norton & Co.

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My Assignment Help (2022) Predicting Credit Card Charges [Online]. Available from: https://myassignmenthelp.com/free-samples/hi6007-statistics-for-business-decisions/the-regression-statistics.html
[Accessed 14 November 2024].

My Assignment Help. 'Predicting Credit Card Charges' (My Assignment Help, 2022) <https://myassignmenthelp.com/free-samples/hi6007-statistics-for-business-decisions/the-regression-statistics.html> accessed 14 November 2024.

My Assignment Help. Predicting Credit Card Charges [Internet]. My Assignment Help. 2022 [cited 14 November 2024]. Available from: https://myassignmenthelp.com/free-samples/hi6007-statistics-for-business-decisions/the-regression-statistics.html.

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