Case study #4

Soft Drink Demand Estimation

A1.

Results of Regressions of demand for drink on cans on the

income per capita, the wheater and price Using the data
collected from all states of US

Through multiple regression we are

Dependent variable: cans per capita per year
constructing the model where
regression 1 2 3
x1=price,x2=income, x3=tempr.
income per -5,372* -2,054 1,224
capita Y=514,27-242,97x1+1,22x2+2,93x3
(2,4) (1,13) (0,8)
mean temp. 4,695** 2,931**
(5,7) (4,12)
price -242,970**
(5,58)
intercept 254,5629 -56,6144 514,26694
(6,19) (0,896) (4,54)
summary statistics
SER 64,1744 49,44768 38,261083
Adj R-square 0,092542 0,46124 0,6774347
n 48 48 48

t statistics in parantheses
*5%, **1% significnace level

Регрессионная статистика
Множественный R 0,835478305
R-квадрат 0,698023997
Нормированный R-квадрат
0,677434724
Стандартная ошибка38,26108281
Наблюдения 48

Дисперсионный анализ
df SS MS F Значимость F
Регрессия 3 148889,8565 49629,95217 33,9023141 1,64557E-11
Остаток 44 64412,06016 1463,910458
Итого 47 213301,9167

КоэффициентыСтанд.ошибка t-стат P-Значение Нижние 95% Верхние 95% Нижние 95,0% Верхние 95,0%
Y-пересечение 514,2669369 113,3315243 4,537721874 4,36383E-05 285,8622576 742,6716161 285,8622576 742,6716161
6-pack price -242,9707509 43,52628127 -5,582161944 1,38245E-06 -330,6922068 -155,2492949 -330,6922068 -155,2492949
income $/capita 1,224163793 1,522612776 0,803988914 0,425725939 -1,844460624 4,292788209 -1,844460624 4,292788209
mean temp.F' 2,931228055 0,711458375 4,120027476 0,000164543 1,497377915 4,365078195 1,497377915 4,365078195

A2. 69,80% of the variation of dependent variable is explained by regression equation. Via p-value
approach we find out except income all independent variables are significant at 95% significance level (they
are less than 0,05).We have learnt that price has negative affect on consumption, when it increases by $1
consumption decrease by 242,97 unit. But temperature has positive affect on consumption- when it is rises
there is an increases in consumption by 2,9 unit. Income has no effect on consumption since it is
insignificant Price elasticity is (-242,97 )*2,19/200= -2,66 says it is relatively inelastic. The changes in
consumption are less than the changes in its price.

A3
Регрессионная статистика
Множественный
0,695820689
R
R-квадрат 0,484166432
Нормированный
0,461240495
R-квадрат
Стандартная ошибка
49,44768027
Наблюдения 48

Дисперсионный анализ
df SS MS F Значимость F
Регрессия 2 103273,6279 51636,81394 21,11872004 3,4E-07
Остаток 45 110028,2888 2445,073084
Итого 47 213301,9167

КоэффициентыСтандартная ошибка
t-статистика P-Значение Нижние 95% Верхние 95%
Нижние 95,0%
Верхние 95,0%
Y-пересечение
-56,61441484 63,11655018 -0,896982086 0,374502338 -183,738 70,50884 -183,738 70,50884
income $/capita
-2,054389677 1,815498449 -1,131584375 0,263803582 -5,71099 1,602212 -5,71099 1,602212
mean temp.F'4,695033589 0,823816926 5,699122512 8,714E-07 3,035781 6,354286 3,035781 6,354286

When we exclude the price from the regression we see that income negatively effect on consumption in this
case, but it is not significant at 95% significance level. Temperature still significant, and changes the demand
by 4,69.

A4

Регрессионная статистика
Множественный R 0,334438716
R-квадрат 0,111849255
Нормированный R-квадрат
0,09254163
Стандартная ошибка
64,17439829
Наблюдения 48

Дисперсионный анализ
df SS MS F Значимость F
Регрессия 1 23857,66046 23857,66046 5,79300953 0,020161697
Остаток 46 189444,2562 4118,353396
Итого 47 213301,9167

КоэффициентыСтандартная ошибка
t-статистикаP-Значение Нижние 95%Верхние 95%
Нижние 95,0%
Верхние 95,0%
Y-пересечение 254,5629047 41,09081851 6,195128595 1,4756E-07 171,851377 337,2744 171,8514 337,2744
income $/capita -5,371683423 2,231815495 -2,40686716 0,0201617 -9,86409501 -0,87927 -9,8641 -0,87927

In case when we use only income as an independent variable, it has negative relationship with consumption,
yet it is significant. So our model will look like Y=254-5,37x
From this output we can say, it is better to relocated canned drink machines into lower income regions
because the coefficient of income has negative sign. It means when income increases by $1 it decreases the
consumption by 5,37. So higher income, lower consumption.