Purchase Solution

Interpreting the given regression results

Not what you're looking for?

Ask Custom Question

Chez Henri is a restaurant chain that operates in 40 different cities. It hired an economist to estimate the factors affecting the demand for its sales. The following equation was estimated using cross sectional data from each of its 40 restaurants.

Y : Annual restaurant sales (in thousands)
X1 : Disposable per capital income (in thousands) of the residents living within 5 miles of a restaurant
X2 : Population (in thousands) within a 5-mile radius of a restaurant
X3 : Number of competing restaurants within a 5-mile radius

The following information was obtained from the regression analysis:Multiple
R: 0.92
R-Square: 0.85
Std. Error of Est.: 0.40

Analysis of Variance
DF Sum of Squares Mean Square F-Stat
Regression 3 220 73.3 18.2
Residual 36 60 1.7

Variable Coefficient Std. Error T-Value
Constant 0.4 0.2 2.0
X1 0.01 0.004 2.5
X2 0.02 0.015 1.3
X3 -20.2 4.50 -4.6

Answer the following questions:
a. Give the estimated demand equation for predicting restaurant sales.
b. Provide an interpretation for each of the regression coefficients.
c. Which of the coefficients are statistically significant and which are not? Explain.
d. What percent of variation are restaurant sales explained by this equation?

Purchase this Solution
Solution Summary

Solution determines the estimated demand equation and interprets the obtained regression coefficients and parameters.

Solution Preview

a. Give the estimated demand equation for predicting restaurant sales.

Y=0.4+0.01*X1+0.02*X2-20.2*X3

b. Provide an interpretation for each of the regression coefficients.

Coefficient of X1 is a positive value. It shows that Y and X1 has direct relationship which shows that Y will increase for any increase in X1 and Y will decrease for any decrease in X1. Its value is 0.01. It means that for every one thousand increase in per disposable capita income of the ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
  • "Thank you"
  • "Really great step by step solution"
  • "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
  • "Thanks Again! This is totally a great service!"
  • "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

View More Free Quizzes
Related BrainMass Solutions

  • SPSS Output on regress age on height

    525909 SPSS Output on Regress Age on Height Using the data collected in W1: Assignment 2, regress age on height using SPSS. Report your results in the APA format and write one to two sentences interpreting the results. Save the SPSS output.

  • Regression Analysis

    Print (past) the computer regression output and provide an economic interpretation of the regression results.

  • Interpreting a regression analysis

    190124 Interpreting a regression analysis Using test data on 20 types of laundry detergent, interpret the results. See the attached excel spreadsheet. Please see the attached file.

  • Using the Regression Function in Excel

    Examine the results of the analysis by 1. Interpreting the coefficient of determination 2. Interpreting the square root of the coefficient of determination 3. Interpreting findings presented in the ANOVA table 4.

  • Statistics - Regression Analysis

    It is just interpreting the given data and writing the answers. The solution file is attached. A Complete, Neat and Step-by-step Solution is provided in the attached file.

  • Regression analysis and F test

    98212 Regression Analysis and F-Test Please help assist interpreting f-tests and a regression result: A) In the first part of the problem I run a joint F test and get the following results: . test hlthg hlthf hlthp ( 1) hlthg = 0 ( 2) hlthf

  • Regression models

    Interpret these results. Please see the attached file. This provides an example of interpreting regression models.

  • Statistics: interpreting the slope of a simple linear regression

    576323 Statistics: interpreting the slope of a simple linear regression Suppose the estimated slope coefficient in a regression model measuring the association between the independent variable exercise (in hours per week) and dependent variable pulse

  • Multiple regression model for racial discrimination

    228223 Interpreting Data, Multiple Regression Model, Correlation Coefficients and Slope 13.32) An expert witness in a case of alleged racial discrimination in a state university school of nursing introduced a regression of the determinants of Salary

  • Important information about Simple linear regression

    379570 Estimating and Interpreting a Linear Regression Model: Example See attached data file. The U.S.

View More Related Solutions