Business
Business, 24.11.2020 23:50, chrjergre6520

Suppose you want to predict sneaker sales on the basis of advertising expenditures and sneaker color, red or blue. You create one dummy variable for the sneaker color (Red = 1 for red sneakers and Red = 0 for blue sneakers) and run the regression on data collected over ten years using the dummy variable and advertising expenditures as your independent variables. The equation you obtain is:

Sales = 631,085 + 533,024(Red) + 50.5(Advertising)

a. How would you interpret the regression model?

b. How would you interpret the coefficient for red sneakers?

answer
Answers: 2

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