SIMPLE LINEAR REGRESSION

SIMPLE LINEAR REGRESSION

This assignment has two parts (excel and written report)

Assignment Overview

You are a consultant who works for the Diligent Consulting Group. In this Case, you are engaged on a consulting basis by Loving Organic Foods. In order to get a better idea of what might have motivated customers’ buying habits you are asked to analyze the factors that impact organic food expenditures. You opt to do this using linear regression analysis.

Case Assignment

Part 1: Excel: (see attached excel data file to be used for this assignment)

Using Excel, generate regression estimates for the following model:

Annual Amount Spent on Organic Food = α + bAge

Part 2: Written Report

**After you have reviewed the results from the estimation, write a report to your boss that interprets the results that you obtained. Please include the following in your report:

a. The regression output you generated in Excel.

b. Your interpretation of the coefficient of determination (r-squared).

c. Your interpretation of the coefficient estimate for the Age variable.

d. Your interpretation of the statistical significance of the coefficient estimate for the Age variable.

e. The regression equation with estimates substituted into the equation. (Note: Once the estimates are substituted into the regression equation, it should take a form similar to this: y = 10 +2x)

f. A discussion of how this equation in item 5 above can be used to estimate annual expenditures on organic food.

g. An estimate of “Annual Amount Spent on Organic Food” for the average consumer. (Note: You will need to substitute the average age into the regression equation for x, the intercept for α, and solve for y.)

Length requirements: 3–4 pages minimum (not including Cover and Reference pages). NOTE: You must submit 3–4 pages of written discussion and analysis.

a. Provide a brief introduction to/background of the problem.

b. Provide a brief discussion of linear regression analysis, including the value of using this estimation technique.

c. Provide a written analysis that addresses each of requirements listed under the “Case Assignment” section.

*Write clearly, simply, and logically. Use double-spaced, black Verdana or Times Roman font in 12 pt. type size.

*Please use keywords as headings to organize the report.

*Avoid redundancy and general statements such as “All organizations exist to make a profit.” Make every sentence count.

*Paraphrase the facts using your own words and ideas, employing quotes sparingly. Quotes, if necessary, should rarely exceed five words.

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