Global test of hypothesis to find regression coefficients

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Reference no: EM1311532

Q1) District manager of Jasons, large discount electronics chain, is investigating why certain stores in her region are doing better than others. She thinks that 3 factors are related to total sales: number of competitors in region, the population in surrounding area, and amount spent on advertising. From her district, consisting of numerous hundred stores, she chooses a random sample of 30 stores. For each store she collected following information.

Y =	total sales last year (in $ thousands).
X₁ =	number of competitors in the region.
X₂ =	population of the region (in millions).
X₃ =	advertising expense (in $ thousands).

Sample data were run on MINITAB, with the following results.

Analysis of variance
SOURCE	DF	SS	MS
Regression	3	3050.00	1016.67
Error	26	2200.00	84.62
Total	29	5250.00	Â
Predictor	Coef	StDev	t-ratio
Constant	14.00	7.00	2.00
X 1	-1.00	0.70	-1.43
X 2	30.00	5.20	5.77
X 3	0.20	0.08

a) Carry out the global test of hypothesis to find out whether any of the regression coefficients are not equal to 0. Use.05 level of significance.

b) Carry out tests of hypotheses to find out which of independent variables have important regression coefficients. Which variables would you consider eliminating? Use the .05 significance level.

Reference no: EM1311532

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