Q2. Simmons\' catalogs are expensive and Simmons would like to send them to only
ID: 3065581 • Letter: Q
Question
Q2. Simmons' catalogs are expensive and Simmons would like to send them to only those customers who have the highest probability of making a $200 purchase using the discount coupon included in the catalog. Simmons' management thinks that annual spending at Simmons Stores and whether a customer has a Simmons credi predicting whether a customer who receives the catalog will use the coupon to make a $200 purchase. Results are presented below: it card are two variables that might be helpful in y(1, use of $200 coupon; 0, no-ase of coupon) - 125+ 0.65 Spendingrs1000)+0.97 Card-1.0 z-value (4.56) (6.09) p-value [0.00o] [0.001) G 13.628, d-2,p-value-0.001 (8.09) 0.007) a. What is the name of the model in which the response variable takes on a value of 1 or 0? b. How do you obtain the degrees of freedom of 2? Explain. c. Evaluate the significance of each estimated coefficient in the above model d. Conduct the overall assessment of this model using the appropriate statistic?Explanation / Answer
1)
In Logistic regression the dependent variable (also known as response variables) takes only 2 values, either 0 or 1. I want to predict the probability of this variable on basis of independent variables in the model.
2)
Df = k = number of independent variables in model = 2
3)
Ho1: the coefficient of spending is not significant. V/s h11: the coefficient of spending a significant. with Z is equal to 6.09 and P value being less than 5% I reject the null hypothesis at 5% level of significance. Hence there is sufficient evidence to conclude that the coefficient of spending is significant.
Ho2: the coefficient of the card is not significant. V/s h12: the coefficient of the card a significant. With Z is equal to 8.09 and P value being less than 5% I reject the null hypothesis at 5% level of significance. Hence there is sufficient evidence to conclude that the coefficient of the card is significant.
4)
Ho: the model is not significant. Versus H1, the model is significant. with G is equal to 13.62 and P value being less than 5%, I reject the null hypothesis at 5% level of significance. Hence there is sufficient evidence to conclude that the model is significant.
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