Submitted by: Submitted by rosazila
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Category: Business and Industry
Date Submitted: 06/04/2012 09:25 AM
CASE STUDY: SOFT DRINK DEMAND ESTIMATION
Demand can be estimated with experimental data, time-series data, or cross-section data. Sara Lee Corporation generates experimental data in test stores where the effect of an NFL-licensed Carolina Panthers logo on Champion sweatshirt sales can be carefully examined. Demand forecasts usually rely on time-series data. In contrast, cross-section data appear in Table 1. Soft drink consumption in cans per capita per year is related to six-pack price, income per capita, and mean temperature across the 48 contiguous states in United States.
1. Estimate the demand for soft drinks using a multiple regression program available on your computer
SPSS Output:
|Coefficientsa |
|Model |
|Model Summary |
|Model |
The estimation soft drink demand is:
Y = 514.267 - 242.971 PRICE + 1.224 INCOME + 2.931 TEMPERATURE
.
2. Interpret the coefficients and calculate the price elasticity of soft drink demand
Output from SPSS
|Coefficientsa |
|Model |
Interpreting the coefficients
Price : Significant effect on expected demand for soft drink
Income : Insignificant effect on expected demand for soft drink
Temperature : Significant effect on expected demand for soft drink...