Russo further wants to understand whether or not competitor Ad Spending $ is imp

Question

Russo further wants to understand whether or not competitor Ad Spending $ is important in determining sales. So he decides to run a third regression. It is very similar to Regression 1 in Question 1, but he did not include CompetitorAd$ as an independent variable. This means, he uses Sales as the dependent variable, and includes NopaneAdS, DumSegment, and DumCopy as three independent variables. The regression results are shown below please explain, 1. Compared with the regression output in Question 1, is this a better model or a worse model? And explain why; 2. Explain the effects of the independent variables (DumCopy, DumSeg, NopaneAd$) on Sales. Be specific; 3. Based on this regression, do you believe competitor Ad Spending $ is important in determining sales? Model Summary Adjusted R Std. Error of the Model R Square Square Estimate 326 225 4.256 a. Predictors: (Constant), DumCopy, DumSeg, NopaneAd$ ANOVAa df Model Sum of Squares 175.502 362.331 537.833 Mean Square 58.501 18.117 Sig 3.229 044 Residual 20 Total 23 a. Dependent Variable: UnitSales b. Predictors: (Constant), DumCopy, DumSeg, NopaneAd$

Explanation / Answer

Ans1)

From model summary it is clear that model is not good fit.

Model will be good fit if adjusted R square is greater than 0.75

But here we find that adjusted R square is very less than 0.75 ;

Hence model is not good fit.

Ans(2)

To check there is there any significant effect or not we go to anova table

We find that significant value 0.044 is less than 0.05 (i.e 5%level of signifcant)

Thus we conclude that at least one effect is differ signifiantly to others

That is at least one of the independent variable have significant effect on dependent variable.

Ans(3)

Now from the coefficient table we check the significant effect of independent variable on dependent variable.

Here we check the effect of each independent variable on dependent

Variable individually.

(i) first we check the effect of nopaneAds on dependent variable unit sale here we find pvalue is 0.018 which is very less than 0.05 hence we coclude that nonpaneAds has significant at alpha =0.05

(ii)p value for Dumseg is 0.925 is greater than 0.05 hence we conclude that Dumseg has not significant effect on dependent variable

(iii)p value for dumcopy is 1.00 which is also greater than 0.05... Thus we conclude Dumcopy has not significant effect on dependent variable

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