Question

Observations are taken on net revenue from sales of a certain plasma TV at 30 retail outlets. A linear regression model was formed using the following variables: Y = net revenue (thousands of dollars); X₁ = shipping cost (dollars per unit); X₂ = expenditures on print advertising (thousands of dollars); and X₃ = expenditures on electronic media ads (thousands of dollars). Partial regression output appears below.

variables	coefficient	std. error	t-value	p-value
Intercept ShipCost PrintAds WebAds	4.31 -0.08 2.26 2.49	70.82 4.67 1.05 -	0.06 -0.02 2.15 2.96	0.95 0.98 0.03 0.004

For each additional thousand dollars spent on printed advertising, what is the precise impact (in dollars) on net revenue?

Answer 1

For each additional thousand dollars spent on printed advertising, what is the precise impact (in dollars) on net revenue?

As the p-value correspond to PrintAds = 0.03

hence it has a significant impact

Y = net revenue (thousands of dollars); X₁ = shipping cost (dollars per unit); X₂ = expenditures on print advertising (thousands of dollars); and X₃ = expenditures on electronic media ads (thousands of dollars).

As the output is for partial regression ,

the coefficient corresponds to printed advertising = 2.26

each dollar increase in printed advertising will increase the net revenue by 2.26

As the coefficient is positive