(Solved): 1. Use methods of descriptive statistics to summarize the data. Comment on the findings. 1 point de ...

1. Use methods of descriptive statistics to summarize the data. Comment on the findings. 1 point descriptive stats 1 point comments 2. Develop estimated regression equations, first using annual income as the independent variable and then using household size as the independent variable. Which variable is the better predictor of annual credit card charges? Discuss your findings. 1 point regressions 1 point comments 3. Develop an estimated regression equation with annual income and household size as the independent variables. Discuss your findings. 1 point regression 1 point comments 4. Discuss the need for other independent variables that could be added to the model. What additional variables might be helpful? 2 points 5. Create a dummy variable that equals one if the family size is higher or equal to 2 . 1 point for dummy 1 point for the new model You must show your work to receive credit. Problem 1 A credit card company is performing an investigation of consumer characteristics that can be used to predict the amount charged by its consumers. Data were collected on annual income, household size, and annual credit card charges from a sample of 50 individuals. 1. Use methods of descriptive statistics to summarize the data. Comment on the findings. 2. Develop estimated regression equations, first using annual income as the independent variable and then using household size as the independent variable. Which variable is the better predictor of annual credit card charges? Discuss your findings. 3. Develop an estimated regression equation with annual income and household size as the independent variables. Discuss your findings. 4. Discuss the need for other independent variables that could be added to the model. What additional variables might be helpful? 5. Create a dummy variable that equals one if the family size is higher or equal to 2 . Family size \( \geq 2 \rightarrow \) dummy \( =1 \) Family size \( =1 \rightarrow \) dummy \( =0 \) How can you modify part 3 to include this variable? How would you explain its coefficient? Is the coefficient statistically significant?