Question
In: Math
Advertising expenditures and sales for the last 5 quarters have been as follows: Quarter Advertising expenditures...
Advertising expenditures and sales for the last 5 quarters have been as follows:
| Quarter | Advertising expenditures | Sales |
|---|---|---|
| 1 | 1 | 4 |
| 2 | 1 | 5 |
| 3 | 2 | 6 |
| 4 | 2 | 7 |
| 5 | 4 | 8 |
In quarter 3, a new product was introduced that would influence sales in quarter 3. 4 and 5. The following model is established:
y=β1x1+β2x2+ ε
where y=sales, x1=advertising expenditures, x2 is a variable that is 1 when the new product is available and 0 otherwise, and ε is an error component. Find the least squares estimate of β1.
Solutions
Expert Solution
Step 1 : put the data in excel.
Step 2 : Go to data tab, select data analysis and click on
regression
Step 3 : Update the values as shown.
Step 4 : The output will be provided as follows.
Regression
Sales = 3.75 +0.75 (Advertising expenditures) + 1.25 (New product)
beta coefficient for advertising = 0.75
milcah answered 6 months agoRelated Solutions
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