Correlation and Regression
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A major supermarket chain wants to determine the effect of promotion on relative competitiveness. Data were obtained from 15 states on the promotional expenses relative to a major competitor (competitor expenses = 100) and on sales relative to this competitor (competitor sales = 100). Note: Use the “Chapter 18 Exercise Supermarket Data.sav” on slate.
You are assigned the task of telling the manager whether there is any relationship between relative promotional expense and relative sales.
a. Plot the relative sales (y-axis) against the relative promotional expense (x-axis), and interpret this diagram.
It can be seen from the plot that there is a relationship between two variables since there is a line that can be observed.
b. Which measure would you use to determine whether there is a relationship between the two variables? Explain.
I can be seen that Pearson correlation is at the point of .994, meaning that there is strong relationship between variables
c. Run a bivariate regression analysis of relative sales on relative promotional expense.
d. Interpret the regression coefficients.
R Square is at the point of .987 meaning that strength of relationship is high.
e. Is the regression relationship significant?
Sig. is at the point of .046 which can be referred as high significance, since it is lower than 0.5
2. To understand the