Install and load the dataset named Carseats (in the ISLR package) into R.
Create a new d...
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Mathematics, 11.02.2020 18:29, ChessieGiacalone
Install and load the dataset named Carseats (in the ISLR package) into R.
Create a new dataframe that is a copy of Carseats. Create two indicator (dummy) variables:
Bad_Shelf = 1 if ShelveLoc = "Bad", 0 otherwise
Good_Shelf = 1 if ShelveLoc = "Good", 0 otherwise
Also, create two interaction variables:
Price_Bad_Shelf = Price* Bad_Shelf
Price_Good_Shelf = Price* Good_Shelf
For Questions 1-2, please estimate a linear regression model (using the lm function) with Sales as the dependent variable and Price, Bad_Shelf, Good_Shelf, Price_Bad_Shelf, and Price_Good_Shelf as independent variables.
Question 1
For the model, does Bad_Shelf have an Intercept significantly (statistically) different from that of the base case?
a) Yes
b) No
c) Maybe
d) Not enough information
Question 2
For the model in Question 2, do the products located on Good_Shelf have a significantly (statistically) different Price coefficient from that of the base case?
a) Yes
b) No
c) Maybe
d) Not enough information
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Answers: 2
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