Colorful Tile, Inc., is a rapidly growing chain of ceramic tile outlets that caters to the do-it-yourself home remodeling market. In 2020, 33 stores were operated in small to medium-size metropolitan markets. An in-house study of sales by these outlets revealed the following (standard errors or standard deviations are in parentheses) Q = 4 – 5P + 2A + 0.2 i + 0.25HF (3) (1.8) (0.7) (0.1) (0.1) R2 = 0.93, standard error of the estimate (SEE) = 6 Here, Q is tile sales (in thousands of cases), P is tile price (per case), A is advertising expenditures (in thousands of dollars), I is disposable income per household (in thousands of dollars), and HF is household formation (in hundreds). (A) Fully evaluate and interpret these empirical results on an overall basis using R2, adjusted R2, and F statistic. (B) Which regression analysis problem might apply to this regression estimate? Why? (C)Which independent variables are statistically significant at the 95% confidence level? Is quantity demanded sensitive to own price (P)?
Colorful Tile, Inc., is a rapidly growing chain of ceramic tile outlets that caters to the do-it-yourself home remodeling market. In 2020, 33 stores were operated in small to medium-size metropolitan markets. An in-house study of sales by these outlets revealed the following (standard errors or standard deviations are in parentheses)
Q = 4 – 5P + 2A + 0.2 i + 0.25HF
(3) (1.8) (0.7) (0.1) (0.1)
R2 = 0.93, standard error of the estimate (SEE) = 6
Here, Q is tile sales (in thousands of cases), P is tile price (per case), A is advertising expenditures (in thousands of dollars), I is disposable income per household (in thousands of dollars), and HF is household formation (in hundreds).
(A) Fully evaluate and interpret these empirical results on an overall basis using R2, adjusted R2, and F statistic.
(B) Which
(C)Which independent variables are statistically significant at the 95% confidence level? Is quantity demanded sensitive to own price (P)?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
