Question: Question 4

A shipping economist studies the relationship between the value per tonne of containerised cargo (x) and the freight rate charged by shipping lines for a same shipping route (y). The following table shows the values of x and y for ten shipments:

a) Find the least squares regression line showing the relationship between x as the independent variable and y as the dependent variable.

b) Test to determine if there is enough evidence to indicate that x and y are positively linearly related at the 5% significance level.

c) Calculate and comment on the value of the coefficient of determination of the linear regression model.

d) Suggest how the results of the linear regression analysis can be improved.