1. You need data on the financial behavior (banking, loans, etc.) of mid-Americans to solve a particular problem your firm is experiencing. You design a questionnaire that you pretest at a local bank officers’ club meeting. You adjust the questionnaire and send it to a stratified sample of mid-Americans in a large Midwestern city. Your strata (see Chapter 8 or assume sub-samples) are defined geographically and consist of three areas. These are inner city, close outskirts, and suburbs.
What possible things could go wrong?
2. Snack Foods International, Ltd. has hired you to analyze demand in 25 regional markets for a new Product Y, called Angelica Pickles. A statistical analysis of demand in these markets shows (t-statistics in parentheses):
Q Y = 250 – 10P + 6P X + 0.25A + 0.04I
(3.33) (3) (2.5) (1.26)
R 2 = 91%
Standard Error of the Estimate = 75
Here, Q Y is market demand for Product Y, P is the price of Y in dollars, A is dollars of advertising expenditures, P X is the average price in dollars of another (unidentified) product, and I is dollars of household income. In a typical market, the price of Y is $1,500, P X is $500, advertising expenditures are $50,000, and disposable income per household is $45,000.
A. Calculate the expected level of demand in a typical market.
B. Define R 2 and interpret R 2 for this equation
C. Briefly discuss the individual variable significance.