The Multiple Regression Model Hill et al Chapter 7.

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Presentation transcript:

The Multiple Regression Model Hill et al Chapter 7

A model of the effects of advertising on revenue.  2 = the change in tr ($1000) when p is increased by one unit ($1), and a is held constant

The assumptions of the model

The estimators

Sampling properties

Interval estimates and significance tests

Measuring Goodness of Fit y y x x

Example: Measuring Advertising Effectiveness tr: revenue (thousand $) p: price ($) a: advertising (thousand $) conclusions –demand is elastic –advertising has a positive effect on sales

Interval Estimates and tests of significance t c = 2.01 A 95% interval estimate for  2 is given by

Does advertising break-even?

Goodness of fit

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