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Regression Analysis

How much does advertising impact market penetration? To assess the impact of advertising in the tobacco industry, a study looked at the amount of money spend on advertising a particular brand of cigarettes and brand preference among adolescents and adults. The data are shown below:(PLEASE SEE TABLE ATTACHED)

a). Look at the data for brand preference for adolescents and amount spent on advertising. Which variable is the dependent variable? Which is the independent variable?

b). Create a scatter plot (using excel) of advertising and adolescent brand preference. Do you think that there is a linear relationship between the two variables? Why or why not?

c). Now create another scatter plot (using excel) using adult brand preference instead. How does this plot compare to the one for adolescent brand preference? From the plots, do you think that adolescent or adult brand preference is more strongly related to advertising expenditures? Why?

d). Find the least-squares line for adolescent brand and advertising expenditures.

e). Interpret the meaning of the slope and intercept for the model. Do they make sense?

f). Use the model to predict adolescent brand preference for each brand studied. How well do the predicted values agree with the actual data?

g). Using alpha = 0.05, is the model significant?


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