Stats Solutions

[Solution] A market research firm is interested in assessing whether there is a relationship between age and consumption patterns of a particular product.

Question: A market research firm is interested in assessing whether there is a relationship between age and consumption patterns of a particular product. They sample 15 individuals and ask their age and the amount they spent on that product in the previous year. The figures are as follows:

Individual Age Amount spent
1 25 168
2 47 153
3 58 131
4 37 156
5 59 105
6 21 181
7 55 145
8 43 88
9 47 42
10 24 168
11 61 28
12 55 48
13 29 165
14 50 31
15 39 55

Required

  1. Calculate Pearson’s correlation coefficient between age and amount spent on this particular product.
  2. Test this correlation for statistical significance (at a 5% significance level).
  3. Estimate a linear regression to examine the relationship between age and amount spent on this product.
  4. If an individual was 35 years old, what would you predict his/her amount spent on this product to be for the previous year?
  5. Comment on any potential problems there might be with this regression.

Price: $2.99
Solution: The downloadable solution consists of 5 pages
Deliverable: Word Document


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