This data set has 400 new observations and 6 variables. The variables are: Length of stay (continuous variable), obesity (1=yes, 0=no), male (1=male, 0=female), age less 65, volume (continuous variable) and yr (continuous variable). Volume is a hospital-level variable equals the number of hip replacement operations that year for Medicare patients. Year takes values of 0 to 6, with 0 corresponding to 1985. Please answer the following questions:

1. Calculate the pair-variable correlation for all of these six variables. Of all explanatory variables, which one does the best job of explaining length of stay in a simple regression model. Why?
2. Estimate a single model to predict length of stay as a function of AGE_65. Please give a clear interpretation of your results: intercept, slope, t-statistics, p-value, R ² .

3) Now estimate a full model to predict length of stay as a function of all variables. Please provide a clear explanation for each coefficient. Compare the age parameter and R ² in this full model to the simple model with just age.

4) Show the F-test for the null hypothesis that all parameters are equal to zero. What is your conclusion about this test?

5) Graph the estimated errors from the full model against age_65. Briefly explain the results.

6) Is the full model correct or you believe that there are some important variables missing? What other variable would you like to include? Please explain your answer.

Price: $15.86

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