Activities Regression Analysis - Run a regression of ‘Average number

Question # 00857288 Posted By: wildcraft Updated on: 07/08/2024 05:33 AM Due on: 07/08/2024
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Activities

3. Regression analysis.

In this activity, the object is to estimate a demand function. Begin by accessing the data file ‘DataRegression.xlsx’. The data consist of quantity (‘average number of coach seats’) and price (‘average price’). Coach seats refers to the seats on a particular airline.

(a) Run a regression of ‘Average number of coach seats’ on ‘Average Price’. This gives a demand function. Use either the ‘data analysis’ package in Excel or my preference R. Provide the summary statistics. Are the estimated coefficients statistically significant?

(b) Use the demand function to predict the number of seats that would be purchased if the price were to $255 for the four quarters in year 5.

(c) Next regress price on quantity and provide the summary statistics. Are the estimated coefficients statistically significant? Do the estimated coefficients differ once the inverse demand function has been converted back to the normal specification?

(d) Now re-estimate the demand function by including in addition to the ‘average price’, the ‘average competitor price’ and the ‘average income’. Interpret each of the estimated coefficients. Are the estimated coefficients statistically significant? How do the results differ from those in (a)?

(e) Repeat the prediction in (b). Is the prediction the same? If not, why?

(f) Repeat (d) but, instead of quantity Q as the dependent variable, take the natural logarithm of the dependent variable, ln(Q), and make the dependent variable.

 

DataRegression

Year & Quarter Average number of coach seats Average Price Average competitor price Average income
Y1, Q1 64.8 250 250 104
Q2 33.6 265 250 101.5
Q3 37.8 265 240 103
Q4 83.3 240 240 105
Y2, Q1 111.7 230 240 100
Q2 137.5 225 260 96.5
Q3 109.6 225 250 93.3
Q4 96.8 220 240 95
Y3, Q1 59.5 230 240 97
Q2 83.2 235 250 99
Q3 90.5 245 250 102.5
Q4 105.5 240 240 105
Y4, Q1 75.7 250 220 108.5
Q2 91.6 240 230 108.5
Q3 112.7 240 250 108
Q4 102.2 235 240 109
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  1. Tutorial # 00852781 Posted By: wildcraft Posted on: 07/08/2024 05:33 AM
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