Run a full model for profit that includes both tenure and site location variable

Question

Run a full model for profit that includes both tenure and site location variables. Tenure related variables are MTenure and CTenure. Site location related variables are population, number of competitors, street level visability, pedestrian access, type of neighborhood, and whether a store stays open 24 hours.

Interpret the coefficients for MTenure and CTenure in model 1. Which of the two variables contributes more to profits (ie which has greater $ impact)?

store Sales Profit MTenure CTenure Pop Comp Visibility PedCount Res Hours24 1 1060294 265014 0 24.80493 7535 2.797888 3 3 1 1 2 1619874 424007 86.22219 6.63655 8630 4.235555 4 3 1 1 3 1099921 222735 23.88854 5.026694 9695 4.494666 3 3 1 1 4 1053860 210122 0 5.371663 2797 4.253946 4 2 1 1 5 1227841 300480 3.87737 6.86653 20335 1.651364 2 5 0 1 6 1703140 469050 149.9359 11.35113 16926 3.184613 3 4 1 0 7 1809256 476355 62.5308 7.326488 17754 3.3779 2 5 1 1 8 1378482 361115 0 56.77208 20824 2.895114 4 3 1 1 9 2113089 474725 108.9935 6.061602 26519 2.63763 2 4 1 1 10 1080979 278625 31.47899 23.19507 16381 2.270771 4 3 1 0 11 1583446 389886 44.81977 2.036961 21550 3.272398 2 5 1 1 12 1444714 329020 277.9877 6.63655 11160 4.903895 4 4 1 0 13 857843 152513 0.657181 1.577002 14186 4.435671 3 2 1 1 14 1171491 261571 87.37226 2.956879 6898 4.233057 4 2 1 1 15 1005627 203951 0 8.476386 8684 3.84422 3 4 1 1 16 883864 196277 23.65853 4.681725 6872 3.344703 3 3 1 0 17 1095695 265584 31.709 3.646817 14477 2.561704 3 4 1 1 18 1704826 394039 239.9698 33.77413 3807 3.994713 5 3 1 1 19 1127332 261495 3.417343 16.98563 4669 2.753616 2 3 1 1 20 1320950 269235 65.06095 5.946612 15377 4.148495 3 2 1 1 21 1237518 282584 24.11856 7.211499 14022 4.020201 3 3 1 1 22 1433440 367036 18.36822 25.95483 8280 4.46436 4 3 1 1 23 1351972 277414 12.38787 3.416838 13797 3.594539 3 4 1 1 24 1071307 267354 44.81977 3.416838 9069 3.28059 2 3 1 0 25 1282886 282124 0 10.31622 6183 3.51702 3 3 1 1 26 898548 211912 0.657181 20.43532 9999 4.178195 3 2 1 1 27 985862 230194 50.11008 17.44559 8153 3.719806 3 2 1 1 28 1141465 273036 23.88854 16.98563 14673 3.193422 3 4 1 0 29 924782 263956 19.51829 23.54004 11350 5.392077 3 2 1 1 30 1874873 333607 73.34144 23.42505 1116 3.578323 3 2 1 1 31 993597 211885 0 10.77618 2578 3.100689 2 2 1 1 32 828918 149033 36.07926 6.63655 9697 4.641468 3 3 1 0 33 1369092 292745 51.72017 3.876797 8177 5.309016 3 2 1 1 34 1557084 382199 29.17885 19.74538 10923 2.361195 4 4 1 1 35 1443230 322624 36.99931 14.80082 14361 3.613021 4 3 1 1 36 1016950 219292 41.59958 20.89528 3218 3.929021 3 2 1 1 37 1202917 187765 23.1985 1.347023 8870 4.491863 3 3 1 1 38 991524 203184 15.60806 1.577002 6557 4.225993 3 2 1 1 39 979361 221130 34.69918 5.486653 8896 5.046338 2 4 1 1 40 1042664 222913 122.7943 16.75565 2521 11.12788 3 4 1 1 41 744211 147327 14.91802 11.92608 9701 4.3646 2 3 1 1 42 1273855 264072 2.497289 86.09446 2106 3.231049 3 2 1 1 43 1296711 337233 177.5704 5.486653 3495 3.653641 4 3 1 1 44 1807740 439781 182.2364 114.1519 20624 3.628561 3 4 0 1 45 1602362 410149 47.64565 9.166325 17808 3.472609 5 3 1 1 46 1339214 315780 6.177505 5.256673 9285 3.144458 4 3 1 1 47 1665657 387853 12.8479 6.63655 23623 2.422707 2 5 1 1 48 1243167 284169 31.47899 8.246407 8491 4.848749 3 2 1 1 49 983296 195276 55.40039 14.68583 1863 3.713871 4 1 1 1 50 935257 251013 12.8479 16.06571 14653 1.751638 3 4 1 0 51 1027035 237344 3.417343 7.096509 3126 2.447474 2 4 1 1 52 1073008 169201 24.11856 3.416838 14859 6.585143 3 3 1 1 53 1355684 365018 57.24049 8.246407 6909 3.156869 2 2 1 1 54 811190 159792 6.670391 3.876797 3747 3.756011 3 2 1 1 55 925744 147672 6.670391 18.3655 10532 6.389294 4 3 1 1 56 916197 189235 4.797424 2.726899 13740 4.597269 2 3 1 0 57 699306 122180 24.34857 2.956879 3642 2.973376 3 2 1 1 58 989760 227601 4.56741 4.106776 8477 3.993874 4 2 1 1 59 1334898 303069 13.30792 13.76591 6231 3.301353 3 3 1 1 60 1433624 356071 33.51625 6.406571 8845 2.719548 3 4 1 1 61 716589 177046 21.81842 13.30595 3014 3.263994 3 1 1 1 62 942915 202641 12.15786 6.86653 9820 4.20145 3 4 1 0 63 1045264 239036 8.247626 6.86653 7581 4.13658 3 3 1 1 64 969509 221157 0 0.887064 17110 2.378613 4 3 1 1 65 1349972 301641 150.2317 23.42505 1075 3.21896 3 1 1 1 66 879581 146058 115.2039 3.876797 1046 6.56979 2 3 1 1 67 1228052 362067 5.257451 3.416838 11552 3.583143 3 3 1 1 68 1018195 236339 17.44816 2.26694 9018 3.50481 4 2 1 1 69 1574290 375393 44.12973 26.75975 5050 3.949484 3 3 1 1 70 1207204 254203 14.91802 3.876797 19809 3.122484 3 4 1 0 71 977566 198529 43.89972 38.37372 3265 3.856324 2 1 1 1 72 848140 196772 126.4745 27.44969 3151 3.680586 2 1 1 1 73 1115450 279193 41.13955 6.406571 6276 4.180132 4 3 1 1 74 1782957 518998 171.0972 29.51951 10913 2.31985 3 4 1 0 75 1321870 296826 2.267276 8.706366 8966 1.886111 4 4 0 1

Explanation / Answer

By running multiple regression in excel we get the results as below:

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.7987

R Square

0.6379

Adjusted R Square

0.5940

Standard Error

56965.4920

Observations

75.0000

ANOVA

df

SS

MS

F

Significance F

Regression

8.00

377314135670.75

47164266958.84

14.53

0.00

Residual

66.00

214174440403.03

3245067278.83

Total

74.00

591488576073.79

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

7610.0416

66821.9942

0.1139

0.9097

-125804.3730

141024.4562

MTenure

760.9927

127.0856

5.9880

0.0000

507.2581

1014.7274

CTenure

944.9780

421.6874

2.2409

0.0284

103.0519

1786.9041

Pop

3.6666

1.4663

2.5006

0.0149

0.7390

6.5942

Comp

-25286.8867

5491.9370

-4.6044

0.0000

-36251.8925

-14321.8808

Visibility

12625.4470

9087.6196

1.3893

0.1694

-5518.5707

30769.4648

PedCount

34087.3588

9073.1961

3.7569

0.0004

15972.1385

52202.5791

Res

91584.6752

39231.2830

2.3345

0.0226

13256.8924

169912.4580

Hours24

63233.3072

19641.1143

3.2194

0.0020

24018.5577

102448.0567

MTenure is significant at 1 percent as the P-value of the coefficient is less than 0.01
CTenure is significant at 5 percent as the P-value of coefficient is less than 0.05
CTenure has greater impact as the coefficient value of CTenure is greater than MTenure
The interpretation of coefficient value is for one unit increase in CTennure there would be 944.97 unit increases in profit

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.7987

R Square

0.6379

Adjusted R Square

0.5940

Standard Error

56965.4920

Observations

75.0000

ANOVA

df

SS

MS

F

Significance F

Regression

8.00

377314135670.75

47164266958.84

14.53

0.00

Residual

66.00

214174440403.03

3245067278.83

Total

74.00

591488576073.79

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

7610.0416

66821.9942

0.1139

0.9097

-125804.3730

141024.4562

MTenure

760.9927

127.0856

5.9880

0.0000

507.2581

1014.7274

CTenure

944.9780

421.6874

2.2409

0.0284

103.0519

1786.9041

Pop

3.6666

1.4663

2.5006

0.0149

0.7390

6.5942

Comp

-25286.8867

5491.9370

-4.6044

0.0000

-36251.8925

-14321.8808

Visibility

12625.4470

9087.6196

1.3893

0.1694

-5518.5707

30769.4648

PedCount

34087.3588

9073.1961

3.7569

0.0004

15972.1385

52202.5791

Res

91584.6752

39231.2830

2.3345

0.0226

13256.8924

169912.4580

Hours24

63233.3072

19641.1143

3.2194

0.0020

24018.5577

102448.0567

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