Question

Use the data in the Excel file Cost of Living Adjustments to find the best multiple regression model to predict the salary as a function of the adjusted cost of living rates. What would the comparable salary be for a city with the following adjustments: groceries: 4%; housing: 9%; utilities: 2%; transportation: 1%; and health care: 8%?

Cost of Living Adjustments

City Comparative Salary Groceries Housing Utilities Transportation Healthcare
Atlanta $60,482.00 15% 25% -10% 6% 5%
Austin $57,530.00 -8% 13% -1% -1% 6%
Boston $85,904.00 16% 141% 43% 11% 33%
Charleston $60,904.00 18% 22% 11% -7% 10%
Charlotte $58,012.00 11% 5% 2% -2% 6%
Chicago $70,000.00 23% 73% 1% 18% 2%
Columbus $54,578.00 1% -1% -5% -6% -1%
Dallas $58,072.00 12% -4% -3% 1% 5%
DC $87,892.00 20% 214% -6% 13% -3%
Denver $65,843.00 7% 64% -8% 1% 11%
Detroit $57,590.00 -2% 15% 0% 6% -1%
Indianapolis $55,120.00 3% 4% -11% -6% 1%
Los Angeles $83,795.00 16% 168% 10% 29% 13%
Lousiville $55,602.00 1% 2% -13% 5% -8%
Minneapolis $65,060.00 16% 43% -10% 10% 8%
New Orleans $57,530.00 10% 24% -17% -5% 1%
New York $136,024.00 37% 479% 26% 30% 19%
Philadelphia $72,048.00 26% 72% 17% 10% 3%
Phoenix $57,651.00 7% 21% -8% 2% 1%
Pittsburgh $59,578.00 9% 21% -3% 14% -1%
Portland $77,349.00 25% 108% -18% 19% 15%
San Diego $86,446.00 18% 187% 18% 27% 15%
San Francisco $105,241.00 38% 304% 3% 26% 22%
Seattle $83,253.00 33% 133% 2% 21% 24%
St. Louis $56,084.00 14% -9% 13% 1% 4%

Answer 1

To find the best multiple regression model to predict salary based on the adjusted cost of living rates, calculate the adjusted rates for each city and use them as independent variables in the regression analysis.

Step-by-step explanation:

To find the best multiple regression model to predict the salary as a function of the adjusted cost of living rates, you can use the data from the Excel file. The first step is to calculate the adjusted cost of living rates by multiplying the city's cost adjustments by the corresponding percentages for groceries, housing, utilities, transportation, and health care. Then, you can use these adjusted rates as independent variables in the multiple regression analysis to predict the salary. The best model would be the one that minimizes the residuals and has the highest R-squared value.

For the given adjustments of groceries: 4%, housing: 9%, utilities: 2%, transportation: 1%, and health care: 8%, you can calculate the comparable salary by plugging these percentages into the best regression model and solving for the salary. Then, plug the given adjustments into the model to calculate the comparable salary.