Write the estimated demand equation for predicting

Reference no: EM13453468

Chez Henri is a restaurant chain that operates in 40 different cities. It hired an economist to estimate the factors affecting the demand for its sales. The following equation was estimated using cross sectional data from each of its 40 restaurants.

Y	Annual restaurant sales (in thousands)
X1	Disposable per capital income (in thousands) of the residents living within 5 miles of a restaurant
X2	Population (in thousands) within a 5-mile radius of a restaurant
X3	Number of competing restaurants within a 5-mile radius

The following information was obtained from the regression analysis:
Multiple R: 0.92
R-Square: 0.85
Std. Error of Est.: 0.40

Analysis of Variance
	DF	Sum Squares	Mean Sqr.	F-Stat
Regression	3	220	73.3	18.2
Residual	36	60	1.7

Variable	Coefficient	Std. Error	T-Value
Constant	0.4	0.2	2.0
X1	0.01	0.004	2.5
X2	0.02	0.015	1.3
X3	-20.2	4.50	-4.6

Answer the following questions:

a. Give the estimated demand equation for predicting restaurant sales

b. Provide an interpretation for each of the regression coefficients

c. Which of the coefficients are statistically significant and which are not? Explain

d. What percent of variation are restaurant sales explained by this equation?

Reference no: EM13453468

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