Business

posted by .

Sales of a product are influenced by the salesperson’s level of education and gender, as well as consumer income, ethnicity, and wealth.

a. Formulate this statement as a multiple regression model (form only, without parameter estimation).

b. Specify dummy variables.

c. If the effects of consumer income and wealth are not additive alone, and an interaction is expected, specify a new variable to test for the interaction.

  • Business -

    Let us adopt the following symbols for the variables:

    · Sales: S ($)

    · Salesperson's level of education: E (Years of education).

    · Gender (M): We use a single dummy variable for two categories. If the observation is male, then the variable M=1, if female then M =0.

    · Consumer income: I ($)

    · Wealth: W ($)

    · Ethnicity: Let us consider three categories Caucasian, Hispanic and Asian. For the three categories we need two dummy variables.

    o Asian (A), which takes the value 1, if it is an Asian and 0 otherwise.

    o Hispanic (H), which takes the value 1, if it is a Hispanic and 0 otherwise.



    b0 is a constant; b1, b2, b3 etc. are coefficients, e is the residual error term.



    The general model will be:

    S = b0 + b1E + b2M + b3I + b4W + b5A + b6H + e

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics Help!

    4) The manager of Collins Import Autos believes that the number of cars sold in a day (Q) depends on two factor: (1) the number of hours the dealership is open (H) and (2) the number of salespersons working that day (S). After collecting …
  2. business statistics

    When autocorrelation of the residuals is present, what effect can this have on interval estimation and significance tests regarding the regression model involved?
  3. English

    Recall an event when you became aware of the importance of dividing chores evenly and fairly without being influenced by gender. Can someone please explain this a little more clearly to me, I kind of get what it says, but I am not …
  4. Computer Flowcharts

    A department store pays its salesperson only by commission. A salesperson receives a commission of 25% on all sales if he/she has sold at least $50,000 worth of merchandise in a pay period. But only 15% if his/her sales are below $50,000. …
  5. business research

    a. Employee job satisfaction (high, normal, low) and employee success (0-2 promotions, 3-5 promotions, 5+ promotions) are to be studied in three different departments of a company. b. Consumers making a brand choice decision between …
  6. business research

    From Chapter 19 - Discussion Question #6, page 574: Sales of a product are influenced by the salesperson’s level of education and gender, as well as consumer income, ethnicity, and wealth. a. Formulate this statement as a multiple …
  7. Math

    An air conditioning salesperson receives a base salary of $2850 per month plus a commission. The commission is 2% of the sales up to and including $25,000 for the month and 5% of the sales over $25,000 for the month. a. Write a piecewise …
  8. Multiple regression

    1) Estimate a multiple regression equation to predict the price of houses in a given community. Employ all available explanatory variables. Is there evident of of multi-collinearity in this model?
  9. college algebra

    A car salesperson's annual income depends on the amount of his sales. His annual income is a salary of $11500 plus 12% of his annual sales. Write a linear equation for his annual income for sales of x dollars. ( I = mx + b ). 11500=I …
  10. culture

    Beliefs about child rearing practices are influenced by: A. ethnicity, intuition, occupation. B. ethnicity, religion, and occupation. C. religion, education, destiny. D. education, occupation, serendipity

More Similar Questions