A market analyst, Amelia, is assessing the demand for perfume from three different brands—Adolfo Dominguez, Chanel, and Tiffany. She suspects there are interactions between the price of the perfume and the brand in the following regression model:

where
Y = Demand
X₁ = Adolfo Dominguez
X₂ = Chanel
X₃ = The price ($) of the perfume
From a random sample, Amelia estimated the constant and the slope coefficients as β₀ = 19.6, β₁ = 318, β₂ = 864, β₃ = -2.896, β₄ = 0.0764, and β₅ = -1.4712.
Help Amelia interpret the estimated slope coefficient values, β₁, β₂, β₃, and (β₃ + β₄).

Transcribed Image Text:

Y = Bo + B₁X₁ + B₂X₂ + B3X3 + (B4X₁ + B5X2)X3 = Bo + B₁X₁ + B₂X2 + B3X3 + B4X1X3 + B5X₂X3