Q2. Simmons\' custoers ocatalogs are expensive and Simmons would like to send th
ID: 3065590 • Letter: Q
Question
Q2. Simmons' custoers ocatalogs are expensive and Simmons would like to send them to only those included in the catalog. Simmons' management who have the highest probability of making a $200 purchase using coupon thinks that annual spending at Simmons Stores customer has a Simmons credit card are two variables that might be helpful in and whether a predicting whether a customer who receives the catalog will use the coupon to make a $200 purchase. Results are presented below y(-1, use of $200 coupon; 0, mo-use of coupon)-1.67+0.43*Spendingr$ 1000)+0.88*Cardl-1.0) (8.09) z-value (2.65) (6.09) p-value [0.013] [0.001] G- 13.628, d-2, p-value -0.001 [0.000] a whatísthemameofthe model in whichtheres onse variabletkesonaval eoflr0? 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? EC 375 Spring 2018 Dr. Lakongo 3Explanation / Answer
A. Logistic Models
B. The degree of freedom in a logit model is calculated by the number of indicator variables.
Df = no. Of independent variable = 2
C. Ho: the beta1 is not significant. H1: the beta1 is significant. With t=6.09, P<0.05, I reject ho and conclude that the beta1 is significant.
Ho: the beta2 is not significant. H1: the beta2 is significant. With G=8.09, P<0.05, I reject ho and conclude that the beta2 is significant.
D. Ho: the model is not significant. H1: the model is significant. With G=13.6, P<0.05, I reject ho and conclude that the model is significant
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