Thursday
July 31, 2014

Homework Help: Statistics - Correlation Coefficient/Regression

Posted by Hannah on Saturday, June 21, 2008 at 8:35pm.

'm having some difficulty with the following question:


The following data shows expenditures (in millions of dollars) and case (sales in millions) for 7 major soft drink brands. Calculate the correlation coefficient. Is this significant at the 5% level (ie, α=.05)? Construct the regression equation for this data. Decide how much RC Cola would make if they spend 643.8. Do the same for Canada Dry if they spend 13.8. Is it a good idea to use this regression equation for RC and Canada Dry? Why?

Brand Spending Sales
Coke 131.3 1929.2
Pepsi 92.4 1384.6
Diet Coke 60.4 811.4
Sprite 55.7 541.5
Dr Pepper 40.2 536.9
Mt Dew 29.0 535.6
7-Up 11.6 219.5
I made my table & came up with:
Ex=420.6
Ey=5958.7
Exy=500073.09
Exsq=35119.7
Eysq=7213830.96

I'm having trouble getting the correlation coefficient. I used the formula in my textbook:

r=nΣxy-(Σx)( Σy) / √n(Σx)-(Σx) * √n(Σy)-(Σy)

but I keep coming up with different answers (I've done it by hand & with my TI-84 plus (LinRegTTest) several times each). I've figured out b1 (14.42378282) for the slope equation but for b0, my answer keeps changing (I get -15.something & the "something" is what keeps changing every time I work the problem out).

Please help!

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