... the Department uses 1 dollar to represent as unit while the data displays thousand dollar unit. b. Significance of the intercept Interestingly, the result of the regression of model (3) suggests an insignificance of the intercept, i.e. the intercept is not significantly different from 0. To confirm that, the following test is conducted. Test hypothesis: H0: ß1=0 HA: ß1=0 LOS: ?=0.05 Test statistic: t = -0.1668 <2 (t stat is from Appendix 1.2) Conclusion: Do not reject H0 i.e. we conclude that the intercept is not significantly different from 0 at 0.05 LOS. The above outcome encourages us to run a regression of no intercept. The detailed results are shown in Appendix 1.3 that derives the following model: ELEXP = 69.282 ROOMNO -99.47DAUD + u (4.232) (40.88) This model seems to produce better results than the previous one (3). However, comparing the two is not a straight forward process of using (conventional) R2. •R2 of intercept-presented model vs. ...

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