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WidgeCorp: Simple and Multiple Correlation and Regression

You're in a brainstorming session at WidgeCorp, where no idea is too outrageous. You're discussing penetration in the school lunch market. Ideas around school lunch subsidies, Internet subsidies, and Internet target marketing are being discussed. As the end of the meeting, the group asks you to prove or disprove some assumptions by looking at correlations.

First, acquaint yourself with the Internet subsidy issue by reading the article Closing the Digital Divide: Internet Subsidies in Public Schools by Austan D. Goolsbee and Jonathan Guryan (link:http://www.chicagobooth.edu/capideas/summer03/digitaldivide.html)

Prepare a chart similar to the one attached to indicate if the correlation between Variables A and B were found to be positive, negative, or minimal.

In your own words, explain what it means if the correlation of 2 variables is positive, negative, or minimal (close to zero) and give an example of each.

Please research on the Web about the concept of correlation, various types of correlation and its applications including simple and multiple correlation along with examples of its applications and at least three references. Discuss how correlation can be used by WidgeCorp to reach its marketing objectives.

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Solution Preview

Please see the attached file for table.

Positive Correlation - the relationship between two variables is such that as one variable's values tend to increase, the other variable's values also tend to increase. This is represented by a positive correlation coefficient. Example would be - the more games a basketball team wins, the more points they get.

Negative Correlation - the ...

Solution Summary

The response outlines negative, positive and minimal correlation as well as saying how they can be used by WidgeCorp in 235 words with 3 references. A table showing the correlations can be applied to variables is attached.