Bijoux Gourmet Pie Inc., is a national distributer of frozen pies in the United States with 48 stores all over the country. The data above pertains to the 2014 activities for these stores. In this table, Q represents the quantity of the frozen pies sold in each store, P stands for the unit price of each pie in dollars, A is each store’s advertising expenditure for the year in dollars, Pc is the average unit price charged by competitors, I represents the average annual disposable income of residents in each market expressed in dollars, POP stands for each market’s population, and T is a predetermined trend factor. Using the data and a multiple regression package: 1) 2) 3) 4) Estimate the coefficients of the demand equation represented by the data. Are the coefficients’ signs in accordance with your a priori expectation? Explain. Test the significance of the overall regression equation at 95% level of confidence. Test the significance of each of the independent variable’s coefficients at 95% level of confidence. 5) Provide an economic interpretation for each of the coefficients in the computed regression 6) State the value of the coefficient of determination and interpret it. 7) Calculate the 2014 price elasticity, cross price elasticity, income elasticity, and advertisement elasticity for the Bijoux Gourmet Pie Inc. 8) Determine the impact of 10% increase in company’s price. Use average price as your base point. 9) Determine the impact of 10% decrease in competitors’ prices. Use average price as your base point. 10) Determine the impact of 5% increase in company’s advertisement expenditure. Use average advertisement expenditure as your base point. 11) Determine the impact of 5% decrease in people’s disposable income. Use average income as your base point. 12) In your opinion, is there any other variable that could have been included in the model? 13) In your opinion, are there any redundant variables? 14) What problem would you expect to see if you had missing variables? 15) What problem would you expect to see if you had too many variables? STORE # Q P 1 193334 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 170041 247709 183259 282118 203396 167447 361677 401805 412312 321972 445236 479713 459379 444040 376046 255203 270881 330271 313485 311500 370780 152338 320804 738760 707015 699051 628838 631934 651162 765124 741364 291773 153018 574486 75396 590190 288112 276619 Pc A I 6,39 15827 6,92 POP T 33337 4116250 7,21 5,75 6,75 6,36 5,98 6,64 5,3 6,08 6,13 7,24 6,08 6,4 6 5,96 7,21 6,55 6,11 5,62 6,06 5,83 5,38 7,41 6,19 5,75 6,61 5,03 6,76 7,04 6,7 6,54 5,73 5,35 6,33 5,94 7 5,19 7,02 7,02 20819 14062 16973 18815 14176 17030 14456 27183 27572 34367 26895 30539 26679 26607 32760 19880 19151 15743 17512 16984 15698 22057 17460 42925 50299 37364 50602 53562 48911 49422 44061 13896 27429 31631 39176 33538 53643 60284 4,84 5,28 6,17 6,36 4,88 5,22 5,8 4,99 6,13 5,82 6,05 5,37 4,86 5,29 4,89 6,97 6,25 6,03 5,08 5,29 6,19 6,94 6,38 5,54 6,73 5,04 4,61 5,85 5,63 6,94 6,37 5,78 4,73 6,7 4,58 5,17 5,15 5,46 33390 33599 33797 33879 34186 35691 35950 34983 35804 35898 36113 36252 36449 37327 37841 34870 35464 35972 36843 37573 37781 37854 39231 28579 28593 28633 28833 29242 29876 30327 30411 29778 30079 30598 30718 30922 31199 31354 4140338 4218965 4226070 4278912 4359442 4363494 4380084 9184926 9237683 9254182 9272758 9300401 9322168 9323331 9348725 5294645 5335816 5386134 5409350 5409358 5425001 5429300 5442595 1,6E+07 1,7E+07 1,7E+07 1,7E+07 1,7E+07 1,7E+07 1,7E+07 1,7E+07 2972443 2974275 2989720 3020244 3021618 3025298 3042834 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 8 1 2 3 4 5 6 7 40 41 42 43 44 45 46 47 48 Average 522446 395314 436103 336338 451321 352181 317322 422455 290963 5,23 5,8 5,32 6,35 5,95 6,01 7,02 5,71 7,36 53595 22626 22697 25475 25734 23777 27544 23852 30487 6,06 6,56 6,38 4,53 6,31 6,24 4,86 4,86 5,32 391917 6,24 29204 5,7 31422 38892 39080 39510 39552 39776 41068 41471 41989 3063011 7611304 7615783 7666220 7710368 7713007 7752393 7754204 7782654 34625 7706365 8 1 2 3 4 5 6 7 8 Bijoux Gourmet Pie Inc., is a national distributer of frozen pies in the United States with 48 stores all over the country. The data above pertains to the 2014 activities for these stores. In this table, Q represents the quantity of the frozen pies sold in each store, P stands for the unit price of each pie in dollars, A is each store’s advertising expenditure for the year in dollars, Pc is the average unit price charged by competitors, I represents the average annual disposable income of residents in each market expressed in dollars, POP stands for each market’s population, and T is a predetermined trend factor. Using the data and a multiple regression package: 1) Estimate the coefficients of the demand equation represented by the data. 2) Are the coefficients’ signs in accordance with your a priori expectation? Explain. 3) Test the significance of the overall regression equation at 95% level of confidence. 4) Test the significance of each of the independent variable’s coefficients at 95% level of confidence. 5) Provide an economic interpretation for each of the coefficients in the computed regression 6) State the value of the coefficient of determination and interpret it. 7) Calculate the 2014 price elasticity, cross price elasticity, income elasticity, and advertisement elasticity for the Bijoux Gourmet Pie Inc. 8) Determine the impact of 10% increase in company’s price. 9) Determine the impact of 10% decrease in competitors’ prices. 10) Determine the impact of 5% increase in company’s advertisement expenditure. 11) Determine the impact of 5% decrease in people’s disposable income. 12) In your opinion, is there any other variable that could have been included in the model? 13) In your opinion, are there any redundant variables? 14) What problem would you expect to see if you had missing variables? 15) What problem would you expect to see if you had too many variables?