Excel Data

https://docs.google.com/spreadsheets/d/1rIRovYzeX_nu93G-a5MB5rMnIY6w0TVAwvunvOKMl3I/edit?usp=sharing

Problem

You'll work with quarterly sales data of work T-shirts from a sample of 100 stores belonging to a large Retailer. The data is contained in problem4.xlsx, the first column is simply a store-id (STOREID), second column contains the quarterly sales in number of T-shirts sold (SALES), the third column gives you the quarter to which these sales belong (QUARTER) and finally the fourth column tells you whether the T-shirts were on promotion or not (PROM) [PROM = 1 implying that the T-shirts were on promotion].

(a) You need to run a regression with SALES as your dependent variable and QUARTER & PROM as your independent variables. Note that QUARTER is a categorical variable so you need to introduce appropriate dummy variables to represent it, choose the 4rth quarter as your reference when you introduce dummy variables. That is, estimate the following regression model

SALES = b₀ + b₁QTR1 + b₂QTR2 + b₃QTR3 + b₄PROM

where QTR1, QTR2, QTR3 are dummy variables for the first, second and third quarters respectively.

Report and interpret the estimated coefficient on QTR1

(b) Based on the estimated regression model in part (a) what is your estimate of the second quarter sales with and without promotions?

(c) What is the impact of promotions on sales?