DSCI 3331 Spring 2015 Assignment 1

You may work in groups of up to 4 people on this assignment. If you work in a group, simply turn in one submission with all names on it. You may get help from others (including the instructor). Due by 6:00 pm Thursday, February 19

Sales Tax in Texas: Tax collected on sales of certain taxable items is a major portion of the revenue in the state of Texas. Declining sales and subsequent declining sales tax revenue has been a major factor in the budget difficulties that have plagued the state in some years. Table 1 (on the next page) provides information on the taxable sales by quarter in the state of Texas, as well as the employment figures (number of people employed) in Texas at the beginning of the quarter. Leave your answers in the units given in the table (i.e. billions and millions).

1. a) Using the taxable sales and jobs data from Table 1, develop a regression equation that could be used to predict the taxable sales based on the number of jobs, and find the coefficient of determination. Round to 3 decimals. For this regression model:

Intercept = -139.960

Slope = 20.215

r2 = 0.916

p-value for F-test 0

b) If the number of jobs in quarter 3 of 2014 was 11.85 (million), the predicted sales (using the regression equation) would be ________99.588________.

c) Use Excel to create a graph of the data. Put employment on the horizontal axis and sales on the vertical axis, and label the axes. For general help in creating charts in Excel, see the Microsoft tutorial videos on “Create a Chart”. Click here to go to the website.

The type of chart needed is the XY Scatterplot in Excel (not specifically shown in the tutorial). When creating a scatterplot in Excel, put the X variable on the left and the Y variable on the right.

2. a) Using the taxable sales data (ignore the jobs) from Table 1, develop a regression line that could be used to predict the sales based on the time period. Let the first quarter of data be time period 1, and let the most recent quarter of sales data be time period 34 (i.e. X = 1, 2, 3, 4, 5, …, 34) and find r2 . Round to 3 decimals. . For this regression model:

Intercept = 63.029

Slope = 0.685

r2 = 0.628

p-value for F-test 0

b) Use the regression model in part a to predict the sales in the first quarter of 2014. _________87.004________.

c) Use Excel to create a graph of the data. Put time period on the horizontal axis and sales on the vertical axis.

Table 1. Taxable Sales and Employment in the State of Texas.

Year QuarterSales

(billions)Nonfarm Employment

(millions)

2006 1 61.89 9.97

2006 2 65.99 10.08

2006 3 65.96 10.15

2006 4 72.06 10.29

2007 1 66.58 10.30

2007 2 69.89 10.43

2007 3 70.23 10.45

2007 4 77.09 10.61

2008 1 69.81 10.57

2008 2 75.14 10.65

2008 3 74.76 10.60

2008 4 79.85 10.66

2009 1 67.53 10.39

2009 2 67.41 10.32

2009 3 64.13 10.21

2009 4 68.42 10.29

2010 1 63.40 10.26

2010 2 68.19 10.39

2010 3 67.83 10.35

2010 4 74.65 10.51

2011 1 69.20 10.47

2011 2 75.09 10.60

2011 3 75.85 10.63

2011 4 83.11 10.74

2012 1 77.92 10.76

2012 2 82.92 10.91

2012 3 82.34 10.93

2012 4 88.13 11.11

2013 1 81.87 11.09

2013 2 86.51 11.22

2013 3 86.54 11.25

2013 4 91.84 11.38

2014 1 85.75 11.39

2014 2 92.60 11.60