QUESTION 2 20 points Save Answer The retail company XYZ is conducting a study tr
ID: 3305891 • Letter: Q
Question
QUESTION 2 20 points Save Answer The retail company XYZ is conducting a study trying to explain and predict customer spending in their retail stores. They compiled the database from their own records and customer surveys, which contains the following information organized per transaction 1. Customer spending per store visit (dependent variable) - measured in $ 2. Season when purchase is completed (summer, spring, winter, and fall). For every season there is a variable that indicate the season (0-no, 1 -yes) 3. Customer's gender-0 male, 1-female . Marital Status-0-single, 1 - married 5. Household income - the total income of the household measured in S 6. Retired status -0-no, 1 -retired 7. Education - number of years that customer spent on education.Explanation / Answer
The coefficient table gives t statistic (and corresponding p values) for each of the demographics and geographies listed. In order to understand which independent variable is most profitable, check for significance. Per rejection rule based on p value, reject null hypothesis [for example, H0: beta1=0 (education is not useful in predicting customer spending per store visit in dollars)] if p value is less than alpha=0.05, and conclude the independent variable to be significant.Studying the p values, it seems that education, household income, retired status, marital status, winter season are the significant demographics.