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In: Statistics and Probability

You are an owner of Tesco supermarket. You have made feature advertisings for last 3 years....

You are an owner of Tesco supermarket. You have made feature advertisings for last 3 years. You want to know the effectiveness of this feature advertising on store traffic(numbers of shoppers) in different week. In data set, you have: average numbers of shoppers, average numbers of feature advertising, and average price each week.

Hi Price Lo Price
Hi Adv 832 1102
625 888
821 1056
605 1407
545 878
701 977
454 999
605 1212
787 905
568 655
Lo Adv 353 698
686 758
455 987
501 754
801 625
563 741
423 532
877 976
235 668
540 802
No Adv 555 689
350 444
623 356
421 690
356 587
489 568
454 568
423 452
323 513
428 425

Q1. Consider a regression model (Model I) that has feature advertising as a single independent variable with intercept. Estimate your model and interpret your estimation results.

Q2. Update above regression model (Model II) by adding an additional independent variable. average price in order to capture the effect of price promotion activities such as coupon during week. Estimate your model and interpret your estimation results. Do you think which model makes more sense between Model I and Model II? Why?

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Expert Solution

orchestra answered 2 years ago
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