You have just completed a regression study in which you are attempting to link weekly sales of SeaFarer’s new sun block spray to three factors: price, advertising and use of a special point of purchase promotion. You used a dummy variable, x₃ , to represent the promotion factor— assigning x₃ a value of β = 0 if no in store promotion was used and a value of 1 if the promotion was used. Output for the study is given below:

a. Can you reject the “All s are0”null hypothesis here at the 5% significance level? Explain. 

b. In this three variable model, does the promotion variable have a significant effect, at the 5% significance level, on sales? Explain. 

c. When the regression model was rerun using only promotion as the independent variable, the p value for the dummy variable representing promotion was .01, making promotion a significant variable at the .05 significance level. What’s going on here?

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Statistics Multiple R R Square Adjusted R Square 0.829 0.688 0602 Std Error Observations 102.213 15 ANOVA df MS FSignif F Regression 25285018 84283.3 8067 0004 Enror (Residual) 11 114923.15 104475 Total 14 367773.33 Coeff Std Em tStat P.value 538.69 11602 44 000 -37.52 11.99 313 001 6.34 827 077 046 promotion yes/o 18 5994 193 008 Intencept price $ advertising $