The following table represents the output of the regression that explains the sa

Question

The following table represents the output of the regression that explains the sales dependent variable (amount of dollars spent by your customers) Gender: 0-male, 1-female Retired: 0-active workforce, 1-retired Marital Status: 0-single, 1-married Household income-continuous variable Population-continuous variable that represents the size of the town, in which the customer resides (measured as a number of people in the area) Based on this output, describe the demographics and geographics of your most profitable target market.

Explanation / Answer

Solution:

For the given scenario, we want to predict the values of the sales based on the different independent variables such as gender, retired or not, household income, marital status and population. The given output for the regression analysis shows the significance of the coefficients in the least squares regression line or equation. For the variable gender, the t test for checking the significance gives the p-value as 0.00 which is less than the alpha value or level of significance as 5% or 0.05, so we reject the null hypothesis that the given coefficient is not statistically significant. This means we conclude that there is sufficient evidence that the given coefficient for the variable gender statistically significant and useful for further estimation or prediction. The p-value for the variable ‘retired’ is given as 0.413 which is greater than the alpha value 0.05, so we conclude that the variable ‘retired’ is not statistically significant. The p-value for the variables household income and population are given as 0.00 < alpha value 0.05, this means both the variables are statistically significant. The p-value for the variable marital status is given as 0.858 which is greater than the given level of significance or alpha value 0.05, so we do not reject the null hypothesis and we conclude that the variable ‘marital status’ is not statistically significant.

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