Fifteen mid-western and mountain states have united in an effort to promote and forecast tourism. One aspect of their work has been related to the dollar amount spent per year on domestic travel (DTE) in each state. They have the following estimates for disposable personal income per capita (DPI) and DTE: State DPI DTE ($Millions)
Minnesota $17,907 $4,933
Iowa 15,782 1,766
Missouri 17,158 4,692
North Dakota 15,688 628
South Dakota 15,98 1,551
Nebraska 17,416 1,250
Kansas 17,635 1,729
Montana 15,128 725
Idaho 15,974 934
Wyoming 17,504 778
Colorado 18,628 4,628
New Mexico 14,587 1,724
Arizona 15,921 3,836
Utah 14,066 1,757
Nevada 19,781 6,455
a. From these data, estimate a bivariate linear regression equation for domestic travel expenditures (DTE) as a function of disposable income per capita (DPI):
b. Illinois, a bordering state, has asked that this model be used to forecast DTE for Illinois under the assumption that DPI will be $19,648.
c. Given that actual DTE turned out to be $7,754 (million), calculate the percentage error in your forecast.