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- Soft Drinks - Case Study Example

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In this case, cross-section data appear in the Excel file. Soft drink consumption in cans per capita per year is related to six-pack price, income per capita, and mean temperature across the…
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Case Study- Soft Drinks
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Download file to see previous pages... The model is statistically significant and thus useful in determining future demand. Note that, significant F = 1.6455* 10-11 (approximately equal to zero). The implication is that the model is relevant with the estimators statistically different from zero (i.e. β1 ≠ β2≠ β3≠0)
5. Now omit the 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? (20%)
The negative sign in the income coefficient implies that a change in income influences quantity of soft drink cans consumed in the reverse direction. Therefore, the region with the lowest per-capita income will have the highest consumption.
However, given that the R2 is 0.11 ( very low), the independent variable only explains 11% of the changes in the dependent variable leaving a very high percentage ( 89%) to be explained by other factors, hence not a good ...Download file to see next pagesRead More
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