Since MILES is not a significant factor, it is dropped from the equation.
Results for the revised equation are shown in Table 2. The equation explains
94 percent of the variation in ADJ. REVM. The Durbin-Watson test for serial
correlation produces an acceptable result.
Figure 1 shows actual and estimated ADJ. REVM by month.
E&D is the largest influence on ADJ. REVM, reflecting the importance of
changes in the economy on changes in taxicab fare revenues. The coefficient of
0.65 is the elasticity, meaning that a 1.0 percent increase in E&D produces a
0.65 percent increase in revenue per mile, assuming no change in other
variables. The very large t-value indicates that the relationship between E&D
and ADJ. REVM is highly significant.