Twelve cities were surveyed to estimate the demand or consumption for hamburgers

Question

Twelve cities were surveyed to estimate the demand or consumption for hamburgers. The consumption of hamburgers was hypothesized to be a function of hamburger price, income, and the price of hot dogs.

8. If the independent variables take on the following values what would hamburger consumption (demand) be: hamburger price 1.35, income 14 (000), and hot dog price 1.55.

9. What is your evaluation of the overall model? Cite specific numbers from the results table(s) to support your opinion.

10. Besides increasing the number of observations, do you have any suggestions on how to change this model in order to improve the results?

RESULTS OF HAMBURG CONSUMPTION OR DEMAND FOR 12 CITIES USING EXCEL (PC Users) SUMMARY OUTPUT Regression Statistics Multiple R 0.99798148 R Square 0.99596703 Adjusted R Square 0.99445466 Standard Error 1.34247357 Observations 12 ANOVA df SS MS F Significance F Regression 3 3560.582118 1186.861 658.5493 6.49981E-10 Residual 8 14.41788223 1.802235 Total 11 3575 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 176.270935 45.28993704 3.892055 0.004596 71.83215252 280.7097 71.83215 280.7097 Hamb Price -106.69008 15.52316904 -6.87296 0.000128 -142.486569 -70.8936 -142.487 -70.8936 Income (1,000s) 4.56509995 1.806029906 2.527699 0.035382 0.400387515 8.729812 0.400388 8.729812 Hot Dog Price -12.155592 20.97372876 -0.57956 0.578161 -60.5210968 36.20991 -60.5211 36.20991 RESIDUAL OUTPUT Observation Predicted Hamb Consump Residuals 1 49.136953 0.863047002 2 78.2225824 1.777417612 3 93.7592292 1.240770755 4 104.874392 0.12560778 5 70.454259 -0.454258959 6 84.6213758 0.378624167 7 56.2871421 -1.287142085 8 61.621646 -1.621645957 9 75.3322528 -0.332252836 10 90.8688997 -0.868899694 11 101.222312 -1.222312264 12 63.5989555 1.40104448

Explanation / Answer

8) Hamburger consumption = 176.27 – 106.69*1.35 +4.56*14 – 12.155*1.55

Hamburger consumption = 77.23

9) The overall model is well specified as the independent variable explains 99.7% of variation in ham burger consumption as is suggested by R2. Also the t- values are also significant.

10) Another option is you can try log-log transformation that can also help in improving the model other than increasing the sample size.

*Please upvote if possible.

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