Preparation (Prep) Sheet
Module 12 Lecture 1
Multiple Regression II
Goal of prep sheets: The goal of each prep sheet is to have you (students) come in prepared for the
materials in the class and to ask questions about what you couldn’t do and/or highlight why you did
something incorrectly.
Learning Goals: Understand how to use dummy variables to allow categorical predictors in multiple
regression. Define multicollinearity, diagnose it using the Variation Inflation Factor (VIF) and Rj2, and
provide strategies to deal with it.
Background Material: Chapter 14.1 and Slides from Module 12 on Multiple Regression -- Dummy Variables
and Multicollinearity.
MAIN DISCUSSION QUESTIONS:
For each of these questions, use the Capital Bike Share Data (part 2) posted on Canvas.
1) Dummy Variables. Run a multiple regression using count as the response, and tempF and
instant as continuous predictors and holiday as a categorical predictor. (Enter them in separate
boxes in Minitab Express.) Interpret the coefficient for holiday. Is holiday significant? Give a
point prediction for count on July 4, 2012 when tempF=84.4, instant=551, and holiday=1.
2) Multicollinearity. Run a multiple regression with count as the response, using both tempF and
tempC as predictor variables. Is the overall model significant? Are the individual coefficients?
What is happening?