Solutions Statistics

Starbucks introduced debit cards in 2001 and since then sales revenues have increased. The cards are

Question: Starbucks introduced debit cards in 2001 and since then sales revenues have increased. The cards are sold in amounts from $5 to $500. A survey of 25 randomly selected customers with these cards was taken and information about the value of their prepaid card, age, the number of days/month they visit Starbucks and their income ($000) was gathered. Use α = 0.05 in all cases. Use p-values in all tests.

a) (2) State whether you would expect a positive or negative relationship between the value of the card and each of the independent variables.

b) (2) Use EXCEL to create a correlation matrix and to run a multiple regression to estimate card value using all independent variables provided. ATTACH A COPY OF THESE OUTPUTS.

c) (5) Test if the overall regression is significant.. Use p-values.

d) (8) Test for significance of each slope coefficient. Use the p-value approach. (Incorporate all tests into ONE five step answer as in the slides.)

e) (5) Based on your results would you say this is a good equation? Explain using the criteria discussed in class. How would you propose improving it?

f) (2) Re-estimate the equation in a form you feel would be more meaningful. ATTACH A COPY OF THESE OUTPUTS.

g) (5) Compare the original model to the new one using the four criteria discussed in class and, based on this comparison choose the ‘best’ model.

Dollar Amt.	Age	Days	Cups	Income
5	25	4	1	20
25	30	12	5	35
10	27	10	4	30
5	42	8	5	30
15	29	11	8	25
50	25	12	5	60
10	50	8	3	30
15	45	6	5	35
5	32	16	7	25
5	23	10	1	20
20	40	18	5	40
35	35	12	3	40
40	28	10	3	50
15	33	12	2	30
200	40	15	5	80
15	37	3	1	30
40	51	10	8	35
5	20	8	4	25
30	26	15	5	35
100	38	19	10	45
30	27	12	3	35
25	29	14	6	35
25	34	10	4	45
50	30	6	3	55
15	22	8	5	30