To decide in what zone should be placed a store which sells video-cassettes, the manager of a firm which sells and rents cassettes makes a study to estimate the demand for each store. The independent variables are: number of inhabitants, average income of inhabitants, number of competitors situated (all these variables refer to a one mile distance) and the price of a video-cassette. You will have a number of 15 supermarkets and the values of all 5 explicative variables. The data are given below:
|
Demand (yi)
|
No. of inhabitants (x1i)
|
Income (x2i)
|
Competitors (x3i)
|
Price (x4i)
|
|
323.581
|
5.556
|
42.746
|
3
|
2.49
|
|
343.682
|
5.917
|
43.106
|
2
|
2.99
|
|
375.264
|
5.483
|
46.993
|
5
|
2.99
|
|
351.242
|
6.400
|
43.249
|
2
|
1.99
|
|
328.417
|
5.917
|
40.695
|
3
|
2.49
|
|
318.069
|
6.683
|
41.253
|
3
|
2.49
|
|
330.959
|
6.065
|
40.791
|
2
|
2.49
|
|
267.236
|
7.491
|
39.932
|
3
|
2.49
|
|
320.883
|
6.284
|
36.826
|
1
|
2.99
|
|
409.535
|
5.851
|
45.300
|
3
|
2.99
|
|
316.262
|
5.681
|
42.645
|
3
|
2.49
|
|
351.806
|
5.187
|
42.306
|
2
|
2.99
|
|
333.655
|
6.164
|
44.842
|
3
|
1.99
|
|
372.679
|
7.320
|
45.233
|
3
|
2.99
|
|
362.796
|
5.062
|
41.426
|
3
|
2.99
|
Questions:
1. What can you say about R and R-squared?
2. How do you interpret the standard error?
3. Explain briefly the meaning of the F-test and interpret its value
4. For which variables did you obtain a significant coefficient? Interpret all the coefficients from an economic point of view
5. Which variables you would eliminate if you were to re-do the estimation?