Question

A marketing manager has developed a regression model to predict quarterly sales of his​ company's down jackets based on price and amount spent on advertising. An intern suggests that he include an indicator​ (dummy) variable for the fall quarter. ​a) How would you code such a​ variable? (What values would it have for each​ quarter? ​b) Why does the​ intern's suggestion make​ sense? ​c) Do you think a regression with the indicator variable for fall would model down jacket sales better than one without that​ predictor?

Answer 1

Answer

The answer and procedures of the exercise are attached in a the following image.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.