Question

An online shopping website collected data regarding its operations and obtained the following linear regression model for the estimated revenue in millions, Y-hat, based on the click-through rate in thousands, x. Y-hat = 1.2+0.2x

What is the best interpretation of the value of the estimated slope of 0.2?

Answer 1

There is an estimated increase in revenue of $0.2 million for each 1,000 additional clicks

Explanation:

The slope (0.2) is the rate of change in Y-hat for each unit change in x.

In this specific case, since Y-hat is the revenue, in millions, and x is the number of clicks, in thousands, the best interpretation is that there is an estimated increase in revenue of $0.2 million for each 1,000 additional clicks