Week 1 Inference for Regression

Team Assignment "Living Green"

Group Task:

Does the recent surge in oil prices stimulate the renewable energy consumption? In this assignment you will apply correlation and regression analysis to examine the relationships between crude oil prices and renewable energy consumption in the U.S. You will model the effect of crude oil prices on renewable energy consumption in the U.S. and will make forecasts.

Group Question: How do crude oil prices affect renewable energy consumption in the U.S. ?

Use the following questions as a guide when formulating your response. Include detailed answers to these questions along with figures, tables and/or equations, if necessary, into the Technical Note of your report:

1. Describe the data presented in the "Data" worksheet. What is your dependent variable, also called response variable? What is your independent variable, also called explanatory variable? How many observations are in the sample? What was the average renewable energy consumption and crude oil price in the years 2003 -2008? Minimum and maximum?
2. Navigate to your individual question. At this step, each student in your group will test different hypothesis about discount means. This is an individual assignment; however, its results are important for success of your group assignment. Therefore, start working on it as early as possible. Ask for the help of your group members if needed.
3. Share the answers to your individual questions. Discuss your results and select the data and technique that would help you to estimate the effect of crude oil on renewable energy consumption.
4. Analyze the effect of the crude oil prices on renewable energy consumption:

• Do oil prices have an impact on renewable energy consumption?
• Do oil price increases tend to reduce or increase the renewable energy consumption in the U.S.?
• By how much on average did renewable energy consumption change when oil prices rose $1.00 per barrel?

1. Make predictions. What would be the renewable energy consumption (in trillion Btu) predicted by your model if the crude oil price will hike up to $150 per barrel?
2. How does an outlier affect regression estimates and subsequent inferences?

Price: $13.07

Solution: The downloadable solution consists of 5 pages, 807 words.
Deliverable: Word Document