A financial analyst theorizes that commute × increase as the percentage of land availability for homes in a city decreases. To test this hypothesis, the analyst uses a regression analysis to explore how land availability predicts commute time. What does land availability represent in this regression?

Rationale

Land availability represents the independent variable in this regression analysis.

In regression analysis, the independent variable is the one that is manipulated or controlled to observe its effect on the dependent variable. Here, land availability is being tested for its predictive power over commute time, establishing it as the factor that influences changes in the dependent variable.

A (It is the target variable.) YOUR ANSWER

The target variable, also known as the dependent variable, is the outcome that is being predicted or explained by the independent variable. In this case, commute time is the target variable, as it depends on the changes in land availability.

B (It is the independent variable.) CORRECT

Land availability is the independent variable because it is the factor that the financial analyst is exploring to see how it affects commute time. This variable is manipulated or observed to determine its relationship with the dependent variable, supporting the hypothesis of the analyst.

C (It is a control.) YOUR ANSWER

A control variable is one that is kept constant during an experiment to ensure that the results are due to the independent variable alone. While land availability may influence the analysis, it is not being controlled but rather tested for its effect on the dependent variable, making this choice incorrect.

D (It is the dependent variable.) YOUR ANSWER

The dependent variable is the one that is influenced by changes in the independent variable. In this scenario, commute time is the dependent variable, as the analyst is investigating how it varies based on the levels of land availability, not the other way around.

Conclusion

In summary, land availability functions as the independent variable in the regression analysis, as it is the factor being examined for its influence on commute time, the dependent variable. Understanding this distinction is crucial for interpreting the outcomes of regression studies and for effective hypothesis testing in financial analysis contexts.

Land availability represents the independent variable in this regression analysis.

Related Questions

Related Quizzes

How familiar were you with this question?

Report an Issue

Rate this Practice Test