The directors of marketing at Vanguard Corporation believes that sales of the co
ID: 3245124 • Letter: T
Question
The directors of marketing at Vanguard Corporation believes that sales of the company’s Bright Side laundry detergent are related to Vanguards own advertising expenditure as well as the combined advertising expenditures of its three biggest rival detergents. The marketing director collects 36 weekly observations on these variables to estimate the following regression:
Coefficient P Value
Intercept 175086.0 0.0098
Advertising 0.8550 0.0128
Rivals Advertising -0.284 0.927
R2 = 0.2247
F = 4.781 P Value on F 0.0150
Fully Evaluate and Interpret these empirical results on the basis of all available statistics (use a 0.05 significance level).
Explanation / Answer
sales = b0 + b1 *Advertising + b2 * Rivals_advertising
here b0 = 175086 , b1 = 0.855 ,b2 = -0.284
sales^ = 175086 +0.855*Advertising -0.284 * Rivals_advertising
if other things remains constant ,increasing Advertising 1 unit increase sales by 0.8550 units
if other things remains constant ,increasing Rivals Advertising 1 unit decrease sales by -0.284 units
if no advertising and no rivals advertising , then sales is 175086
when p-value is less than alpha, variables are significant
at 0.05 significance level ,intercept and Advertisng are significant
Rivals Advertising is not significant
r^2 = 0.2247
it means that this model explains 22.47 % of total variation
P-value for F = 0.0150 < 0.05
hence the model is significant at 0.05 significance level).
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.