A marketing research company showed a sample of 100 male customers a new type of power tool. Each customer was shown the tool and given the chance to use it for several minutes. Each customer was told the tool would cost one of 10 prices, in $10 increments from $60 to $150, and then asked to rate the quality of the tool from 0 (low) to 10 (high). The tool is the same; only the stated price differs. In summarizing the results, the research company reported a linear equation summarizing the ft of the average quality rating versus the offered price (n =10):
Estimated Average Rating = 115 - 0.5 Offered Price,
with r2 = 0.67 and s= = 15
How would the estimated equation and summary statistics likely differ had the company used individual ratings rather than averages?

  • CreatedJuly 14, 2015
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