Question

Imagine you work for Company Xtreme, and you are interested in seeing how consumer brand loyalty influences how much consumers spend weekly on their products. 25 customers completed a survey in which participants were asked to indicate “To what extent do you agree with the following statement: I consider myself to be brand loyal to Company Xtreme” (1 = Strongly Disagree to 7 = Strongly Agree). Additionally, you asked participants to “please write down how much you spend weekly on Company Xtreme products”. The results of the survey are listed in the table below:

1. Calculate the simple regression equation that predicts average weekly expenditures based on participant's brand loyalty scores. Then, predict the average weekly expenditures of an individual with a brand loyalty score of 4.

Participant (i)	Brand Loyalty	Average Weekly Expenditures
1	3	$126
2	6	$475
3	5	$207
4	6	$347
5	4	$103
6	4	$74
7	2	$53
8	1	$47
9	5	$177
10	2	$4
11	2	$73
12	6	$223
13	4	$121
14	7	$504
15	4	$51
16	1	$0
17	2	$50
18	7	$459
19	5	$266
20	6	$403
21	1	$75
22	6	$350
23	4	$272
24	7	$364
25	5	$302

Answer 1

Solution

we will solve it by using excel and the steps are

Enter the Data into excel

Click on Data tab

Click on Data Analysis

Select Regression

Select input Y Range as Range of dependent variable.

Select Input X Range as Range of independent variable

click on labels if your selecting data with labels

click on ok.

So this is the output of Regression in Excel.

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.8823
R Square	0.7785
Adjusted R Square	0.7689
Standard Error	76.3106
Observations	25.0000
ANOVA
	df	SS	MS	F	Significance F
Regression	1.0000	470706.8430	470706.8430	80.8315	0.0000
Residual	23.0000	133936.1170	5823.3094
Total	24.0000	604642.9600
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	-92.1681	36.4106	-2.5314	0.0187	-167.4892	-16.8470	-167.4892	-16.8470
Brand Loyalty	70.7638	7.8708	8.9906	0.0000	54.4818	87.0459	54.4818	87.0459

Using above output the regression equation

Average Weekly Expenditures = -92.1681+70.7638*Brand Loyalty

predict the average weekly expenditures of an individual with a brand loyalty score of 4.

Average Weekly Expenditures = -92.1681+70.7638*Brand Loyalty

Average Weekly Expenditures = -92.1681+70.7638*4

Average Weekly Expenditures = $190.8871