# Summarize Implications of Given Regression Equation

Anonymous

Question description

A study was conducted on the labour-hours costs of Federal Deposit Insurance Corporation (FDIC) audits of banks. Data were obtained on 91 such audits. Some of these were conducted by the FDIC alone and some jointly with state auditors. Auditors rated banks' management as good, satisfactory, fair or unsatisfactory. The model estimated was:

log y = 2.41 + 0.3674 logx1 +0.2217 logx2 + 0.0803 logx3 -0.1755 x4 + 0.2799 x5 + 0.5634 x6 - 0.2572 x7 + e

R^2 = 0.766

Coefficient estimates associated with standard errors:

x1 = 0.0477

x2 = 0.0628

x3 = 0.0287

x4 = 0.2905

x5 = 0.1044

x6 = 0.1657

x7 = 0.0787

Where:

y = FDIC auditor labour-hours

x1 = total assets of bank

x2 = total number of offices in bank

x3 = ratio of classified loans to total loans for bank

x4 = "1" if management was good, "0" otherwise

x5 = 1 if management was "fair" 0 otherwise

x6 = 1 if management was "unsatisfactory" 0 otherwise

x7 = 1 if audit was conducted jointly with the state, 0 otherwise

Write a summary of these results.

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