Bid-rigging in highway construction. Refer to the multiple regression example in Section 4.14 (p. 235). Recall that the cost (y) of constructing a
road was modeled as a function of DOT engineers’ estimated cost (x1) and a dummy variable (x2) for whether the winning bid was fixed or competitively bid. Access the data saved in the FLAG file to carry out a complete residual analysis for the model E(y) = β0+ β1x1+ β2x2+ β3x1x2. Do you recommend making any model modifications?
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