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Case Study about Honeymoon Destinations

To complete this assignment, use to the "Honeymoon Destinations" reading from your studies for this unit, and the Honeymoon Destinations Code-book Excel file and the Honeymoon Destinations Code-book Errata document linked in the Resources. Note that there are three discrepancies between the data in the case code book from the reading and the data in the Honeymoon Destinations Code-book Excel file. These exceptions are outlined in the Honeymoon Destinations Errata document. Conform to the Excel file from the Resources for the actual data for this assignment.

Suppose that Todd Bobzien and Clayton Rose have engaged you to analyze the data they gathered via their direct-mail survey. The responses of the 91 people who returned the survey are represented in the 54 variables in the Honeymoon Destinations Code-book Excel file. (Refer to the data code-book in the "Honeymoon Destinations" reading for an explanation of what each of the variables appearing in the spreadsheet represents.)

Bobzien and Rose have some ideas that they would like you to investigate:

1. They believe that people with higher incomes would be more likely both to be interested in a video about potential honeymoon destinations, and to be willing to pay more for such videos. They want you to determine what the data indicate about this.

2. They also believe that individuals with higher incomes (in the top half of annual income levels, nationwide) have different interests than those with lower incomes, and they would like to target those with higher incomes. Bobzien and Rose want you to determine what attributes of a video would interest that higher-income group; specifically:
Which destinations interest them most?
What characteristics of resorts interest them most?
How many resorts do they want to see on a video?

3. In the beginning, they need to focus their marketing and distribution to as few channels as possible, and they want to know what the very best channels would be, based on what the data suggests.

4. Clayton believes that the individuals in their target group (those with higher incomes) would be willing to spend at least fifteen dollars on a video, and he wants you to test that hypothesis.

5. Todd is less interested in testing a hypothesis than he is in developing an estimate for what people would be willing to pay. He would like 95% confidence intervals for the average price people would be willing to pay: one for the higher-income group, one for the lower-income group.

6. They both want to know what family member typically does the research about possible honeymoon destinations, and who primarily makes the decision on selecting the destination.

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There are lots of different ways to answer each of these questions. Let me know if you have any questions about what I did, or if you want to discuss answering a question using a different method.

Activity Instruction
1. They believe that people with higher incomes would be more likely both to be interested in a video about potential honeymoon destinations, and to be willing to pay more for such videos. They want you to determine what the data indicate about this.
Hints: Descriptive statistics -tabular and/or graphical as appropriate- of (i) interest in a video (ii) willingness to pay for more. You want to do this by income class. Where would you draw the line for income? What would you consider higher income? You could also test for differences.

Let's divide the sample by income and make a table showing each income group's interest in a video and willingness to pay for more.

Income is variable 54, video interest is variable 43, and willingness to pay is variable 53.

I made a table in Excel dividing the cases by income, then finding the average video interest and average amount willing to pay for each group.

Income Interest in Video Amount Willing to Pay
V54 V43 V53
$20,000 - $29,999 1.29 $2.47
$30,000 - $39,999 1.57 $5.00
$40,000 - $49,999 3.00 $8.00
$50,000 - $59,999 3.15 $11.85
$60,000 - $69,999 4.27 $18.36
$70,000 - $79,999 5.54 $24.77
$80,000 - $89,999 5.78 $29.94
$90,000 - $99,999 7.00 $30.20

With higher income, peoples' interest in the video and their willingness to pay for it increase. People with the highest level of income (in the $90,000 range) are willing to pay over $30 for the video, while people with the lowest level of income, are willing to pay much less than that.

I also made a graph. Income is on the x-axis, and interest (blue) and willingness to pay (pink) are on the y-axis. The graphs for both variables increase as you go from left to right, indicating that there is a positive correlation between income and both of the other variables.

People with higher incomes tend to have more of an interest in the videos and more of a willingness to pay than people with lower incomes.

2. They ...

$2.19