Online clothes. An online clothing retailer keeps track of its customer's purchases. For those customers who signed up for the company's credit card, the company also has information on the customer's Age and Income. A random sample of 500 of these customers shows the following scatterplot of Total Yearly Purchases by Age:
The correlation between Total Yearly Purchases and Age is r = 0.037. Summary statistics for the two variables are:
|
|
Mean
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SD
|
|
Age
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29.67 yrs
|
8.51 yrs
|
|
Total yearly purchase
|
$572.52
|
$253.62
|
a) What is the linear regression equation for predicting Total Yearly Purchase from Age?
b) Do the assumptions and conditions for regression appear to be met?
c) What is the predicted average Total Yearly Purchase for an 18-year-old? For a 50-year-old?
d) What percent of the variability in Total Yearly Purchases is accounted for by this model?
e) Do you think the regression might be a useful one for the company? Explain.