Question

Market Strategy

From the following market-segmentation study below, present three regression models for consumer durable goods expenditures (C) as a function of all possible combinations of net income (I) and family size (F). Please provide regression results along with regression equations. Analysis should be done using Excel. The market study is below:

In a market-segmentation study, data on net income (I) in thousands, family size (F), and expenditures on consumer durable goods (C) were collected from 20 randomly selected households:

The company sponsoring the study was interested in isolating the effects of income and family size on the dollar amounts spent for consumer durable goods.

I	F	C
10	4	1960
10	3	2390
15	4	3060
15	5	3220
20	6	3570
20	5	4360
25	7	4970
25	6	5190
30	8	5390
30	7	5550

Answer 1

Using Excel<data<data analysis<Regression

Here is the output:

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.984103
R Square	0.968459
Adjusted R Square	0.959447
Standard Error	262.0523
Observations	10
ANOVA
	df	SS	MS	F	Significance F
Regression	2	14759540	7379770	107.4649	5.57E-06
Residual	7	480700	68671.43
Total	9	15240240
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	986	351.5801	2.804482	0.026354	154.6452	1817.355	154.6452	1817.355
I	228.2	35.15801	6.490697	0.000337	145.0645	311.3355	145.0645	311.3355
F	-288	165.7365	-1.7377	0.12583	-679.904	103.9044	-679.904	103.9044

The regression Equation is:

C= 986+228.2*I-288*F