FINAN 2 Managerial Economics – Estimate the demand for soft drinks using a multiple regression program
Managerial Economics
Questions
1.
Estimate
the demand for soft drinks using a multiple regression program available on
your computer.
2.
Interpret
the coefficients and calculate the price elasticity of soft drink demand.
3.
Omit
price from the regression equation and observe the bias introduced into the
parameter estimate for income.
4.
Now
omit both price and temperature from the regression equation. Should a
marketing plan for soft drinks be designed that relocates most canned drink
machines into low-income neighborhoods? Why or why not?
TABLE 1 Soft Drink Demand Data (available as an
Excel file on this book’s Web site)
CANS/ CAPITA/ YR
6-PACK $ PRICE
INCOME $/ CAPITA
MEAN TEMP. ̊ F
Alabama
200
2.19
13
66
Arizona
150
1.99
17
62
Arkansas
237
1.93
11
63
California
135
2.59
25
56
Colorado
121
2.29
19
52
Connecticut
118
2.49
27
50
Delaware
217
1.99
28
52
Florida
242
2.29
18
72
Georgia
295
1.89
14
64
Idaho
85
2.39
16
46
Illinois
114
2.35
24
52
Indiana
184
2.19
20
52
Iowa
104
2.21
16
50
Kansas
143
2.17
17
56
Kentucky
230
2.05
13
56
Louisiana
269
1.97
15
69
Maine
111
2.19
16
41
Maryland
217
2.11
21
54
Massachusetts
114
2.29
22
47
Michigan
108
2.25
21
47
Minnesota
108
2.31
18
41
Mississippi
248
1.98
10
65
Missouri
203
1.94
19
57
Montana
77
2.31
19
44
Nebraska
97
2.28
16
49
Nevada
166
2.19
24
48
New Hampshire
177
2.27
18
35
New Jersey
143
2.31
24
54
New Mexico
157
2.17
15
56
New York
111
2.43
25
48
North Carolina
330
1.89
13
59
North Dakota
63
2.33
14
39
Ohio
165
2.21
22
51
Oklahoma
184
2.19
16
82
Oregon
68
2.25
19
51
Pennsylvania
121
2.31
20
50
Rhode Island
138
2.23
20
50
South Carolina
237
1.93
12
65
South Dakota
95
2.34
13
45
Tennesse
236
2.19
13
60
Texas
222
2.08
17
69
Utah
100
2.37
16
50
Vermont
64
2.36
16
44
Virginia
270
2.04
16
58
Washington
77
2.19
20
49
West Virginia
144
2.11
15
55
Winsconsin
97
2.38
19
46
Wyoming
102
2.31
19
46
