Use forward selection stepwise regression to develop the multiple regression model. The variable x2, family income, was brought into the model. Discuss why this happened.
The J. J. McCracken Company has authorized its marketing research department to make a study of customers who have been issued a McCracken charge card. The marketing research department hopes to identify the significant variables that explain the variation in purchases. Once these variables are determined, the department intends to try to attract new customers who would be predicted to make a high volume of purchases.
Twenty-five customers were selected at random, and values for the following variables were recorded in the file called McCracken:
y = Average monthly purchases 1 in dollars 2 at McCracken
x1 = Customer age
x2 = Customer family income
x3 = Family size