# Question

A chain of small convenience food stores performs a regression analysis to explain variation in sales volume among 16 stores. The variables in the study are as follows:

Sales: Average daily sales volume of a store in thousands of dollars

Size: Floor space in thousands of square feet

Parking: Number of free parking spaces adjacent to the store

Income: Estimated per household income of the zip code area of the store

Output from a regression program (StataQuest) is shown here:

a. Write the regression equation. Indicate the standard errors of the coefficients.

b. Carefully interpret each coefficient.

c. Locate R2 and the residual standard deviation.

d. Is there a severe collinearity problem in this study?

Sales: Average daily sales volume of a store in thousands of dollars

Size: Floor space in thousands of square feet

Parking: Number of free parking spaces adjacent to the store

Income: Estimated per household income of the zip code area of the store

Output from a regression program (StataQuest) is shown here:

a. Write the regression equation. Indicate the standard errors of the coefficients.

b. Carefully interpret each coefficient.

c. Locate R2 and the residual standard deviation.

d. Is there a severe collinearity problem in this study?

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