2. Consider a log-linear regression for the weekly sales (number of cans) of a national brand...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2. Consider a log-linear regression for the weekly sales (number of cans) of a national brand of canned tuna (SALI - target brand sales) as a function of the ratio of its price to the price of a competitor, RPRICE3-100(price of target brand/price competitive brand#3), In (SAL1)=B + BRPRICE3 + e Using N-52 weekly observations, the OLS estimated equation is In (SAL1) 11.481 -0.031RPRICE3 S.C. (0.535) (0.00529) = a. The sample mean of RPRICE is 99.66, its median is 100, its minimum value is 70.11, and its maximum value is 154.24. What do these summary statistics tell us about the prices of the target brand relative to the prices of its competitor? b. Interpret the coefficient of RPRICE3. Does its sign make economic sense? c. Using the "natural" predictor, exp[in (SALT)]-SAL. - exp(11.481-0.031RPRICE3), predict the weekly sales of the target brand if RPRICE3 takes its sample mean value. What is the predicted sales if RPRICE3 equals 140? d. The estimated value of the error variance from the regression above is a = 0.405 and (RPRICE3,- RPRICE) = 14757.57 Construct a 90% prediction interval for the weekly sales of the target brand if RPRICE3 takes its sample mean value. What is the 90% prediction interval for sales if RPRICE3 equals 140? Is one interval wider? Explain why this happens. (=1 e. The fitted value of In(SAL1) is In (SAL1). The correlation between In(SAL1) and In (SAL1) is 0.6324, the correlation between In (SAL1) and SALI is 0.5596, and the correlation between exp[ln (SAL1)] and SAL1 is 0.6561. Calculate the R that would normally be shown with the fitted regression output above. What is its interpretation? Calculate the "generalized-R". What is its interpretation? 2. Consider a log-linear regression for the weekly sales (number of cans) of a national brand of canned tuna (SALI - target brand sales) as a function of the ratio of its price to the price of a competitor, RPRICE3-100(price of target brand/price competitive brand#3), In (SAL1)=B + BRPRICE3 + e Using N-52 weekly observations, the OLS estimated equation is In (SAL1) 11.481 -0.031RPRICE3 S.C. (0.535) (0.00529) = a. The sample mean of RPRICE is 99.66, its median is 100, its minimum value is 70.11, and its maximum value is 154.24. What do these summary statistics tell us about the prices of the target brand relative to the prices of its competitor? b. Interpret the coefficient of RPRICE3. Does its sign make economic sense? c. Using the "natural" predictor, exp[in (SALT)]-SAL. - exp(11.481-0.031RPRICE3), predict the weekly sales of the target brand if RPRICE3 takes its sample mean value. What is the predicted sales if RPRICE3 equals 140? d. The estimated value of the error variance from the regression above is a = 0.405 and (RPRICE3,- RPRICE) = 14757.57 Construct a 90% prediction interval for the weekly sales of the target brand if RPRICE3 takes its sample mean value. What is the 90% prediction interval for sales if RPRICE3 equals 140? Is one interval wider? Explain why this happens. (=1 e. The fitted value of In(SAL1) is In (SAL1). The correlation between In(SAL1) and In (SAL1) is 0.6324, the correlation between In (SAL1) and SALI is 0.5596, and the correlation between exp[ln (SAL1)] and SAL1 is 0.6561. Calculate the R that would normally be shown with the fitted regression output above. What is its interpretation? Calculate the "generalized-R". What is its interpretation?
Expert Answer:
Answer rating: 100% (QA)
a The summary statistics of RPRICE provide information about the prices of the target brand relative to its competitor The sample mean of RPRICE 9966 indicates that on average the price of the target ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
Students also viewed these economics questions
-
Let A, B be sets. Define: (a) the Cartesian product (A B) (b) the set of relations R between A and B (c) the identity relation A on the set A [3 marks] Suppose S, T are relations between A and B, and...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Why would senior managers want to distort factor prices by using cost allocations?
-
A freezer has a coefficient of performance equal to 4.0. How much electrical energy must this freezer use to produce 1.5 kg of ice at -5.0 C from water at 15 C?
-
Instructions: Assume you are getting yourself into a manufacturing business whose products are sold through various outlets across the country. The company is looking to improve its supply chain...
-
What is a thermal stress?
-
Harlen Industries has a simple forecasting model: Take the actual demand for the same month last year and divide that by the number of fractional weeks in that month. This gives the average weekly...
-
A commuter airplane starts from an airport located at the origin. First it flies to city A located 99 km away from the airport in a direction 34 North of East. Next it flies 58.8 km at 38 West of...
-
Company A and Company B have been doing business together for many years and have entered into many contracts for Company A to supply Company B with "green colored widgets." The color dye lots are...
-
report issued by Malaysia Insurance Institute (MIM) reported that the average premium for health insurance per customer aged between 40-50 within RM250 per month. An individual claims that the...
-
Cost of completed job: Direct materials $15,500 Direct labor 21,000 Manufacturing overhead 16,800 Total cost $53,300 Unit cost ($53,300 2,000) $26.65 (a) On the basis of this data, answer the...
-
difference between Religion and Psychopathology
-
What opportunities did American Airlines and US Airways have to collude through multimarket contact before the merger?
-
Use the following table: Large stocks Small stocks Long-term corporate bonds Long-term government bonds U.S. Treasury bills Inflation Average return 11.76% 16.46 6.23 6.10 3.83 3.10 a. Determine the...
-
8 for 0 < < 6 for 6
-
Select a mass spectrometric technique with the highest mass resolution for identifying an unknown compound being eluted from a liquid chromatography column
-
The following is intended to explore what kinds of own-price demand relationships are logically possible in a two-good model with exogenous income (unless otherwise specified). A: For each of the...
-
Public School Teacher Salaries, Class Size and Private School Markets: In exercise 14.10, we noted that private schools that charge tuition operate alongside public schools in U.S. cities. There is...
-
In the U.S., Presidential elections are not won by the candidate who wins the popular vote nationally. (If they were won in this way, Al Gore would have become President in 2000.) Rather, each state...
-
December 2007. When she joined, she signed a membership agreement that had a release of liability that stated: 24 Hour. will not be liable for any injury, including, without limitation, personal,...
-
Recall the facts in Leonard v. Pepsico Had this been a contract, would it have been subject to the Statute of Frauds?
-
John J. Williams began working at Delaware Elevator as a branch sales manager in late 2004. The company manufactures components for elevators and installs and repairs elevators. It employs 175 people...
Study smarter with the SolutionInn App