Statistics for Business: Decision Making and Analysis, 3rd Edition

1. 1. ... leveraged in (1) and (2), but not (3).

   2. Will the r² of the regression increase, decrease, or stay about the same if the marked point is added to a regression?⁵

      ⁵ R² will decrease in (1), stay about the same (a bit higher) in (2), and be a bit lower in (3).

   3. How will adding the marked point to the regression affect the estimated slope and intercept?⁶

      ⁶ The slope will decrease and the intercept increase in (1), both will stay about the same in (2), and the intercept will increase a little and the slope stay about the same in (3).

Extrapolating Prediction Intervals

The presence of a leveraged outlier also affects prediction. Consider predicting the cost to the contractor of building the 875-square-foot addition. With the outlier, regression predicts the ...