Weekly Gross Revenue (S100s)Television AdvertisingNewspaper Advertising 1 Market

Question

Weekly Gross Revenue (S100s)Television AdvertisingNewspaper Advertising 1 Market 2 Mobile 3 |Shreveport 4 Jackson 5 Birmingham 6 Little Rock 7 Biloxi 8 New Orleans 9 Baton Rouge 10 101.3 51.9 74.8 126.2 137.8 101.4 237.8 219.6 5.0 3.0 4.0 4.3 3.6 3.5 5.0 6.9 3.0 1.5 4.0 2.3 5.8 Instructions: Use the data above (Not including "Market") to do the following: 1. Run the "Regression" function from Excel's Analysis Toolpak (Output on this page) (Weekly Gross Revenue = b0+b1*Television Advertising-b2"Newspaper Advertising) 2. Use the output to answer the following: 12 13 15 16 17 18 19 20 Question 1: Is there a significant regression relationship? Question 2: What test statistic did you use to answer Question 1? 21 Question 3: Is there a statistically significant relationship between Weekly Gross Revenue and Newspaper? Question 4: If we spend 3.4 on Television Advertising and 1.9 on Newspaper Advertising, how much Weekly Gross 23 24 25 26 27 28 29 30 Revenue should we expect? Question 5: Is this extrapolation? Why or why not? Question 6: What is the standard regression error?

Explanation / Answer

1) Ans:

Weekly Gross Revenue = -42.54+22.40*Telivision Advertising+19.49*Newspaper Advertising

2 Ans:

1) Yes, there is significant regression relation because the p-values of Telivision and newspaper advertising are less than 0.05 level of significance.

2) t- test statistic is used to test the significance.

3) The estimated p-value of newspaper advertising is 0.00. Hence, there is a statistically significant relationship between the weekly gross revenue and newspaper.

4) If we spend 3.4 on television advertising and 1.9 on newspaper advertising, the expected weekly gross revenue is

Weekly Gross Revenue = -42.54+22.40*3.4+19.49*1.9=70.67

5) Ans: This is an extrapolation because the estimation of this will remain applicable.

6) The standard regression error is 20.33.

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept -42.54 28.55 -1.49 0.20 -115.92 30.84 Telivision Advertising 22.40 7.10 3.16 0.03 4.16 40.65 Newspaper Advertising 19.49 3.70 5.27 0.00 9.99 28.99

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