Introduction to Multiple Regression: How Much Is Your Car Worth?

Abstract

Data collected from Kelly Blue Book for several hundred 2005 used General Motors (GM) cars allows students to develop a multivariate regression model to determine car values based on a variety of characteristics such as mileage, make, model, engine size, interior style, and cruise control. Students learn to look at residual plots to check for heteroskedasticity, normality, autocorrelation, and multicollinearity as well as explore techniques for variable selection and develop specially constructed variables.