Income Household Amount Income Household Amount ($1000s) Size Charged ($) ($1000s) Size Charged ($) 54 3 4016 54 6 5573 30 2 3159 30 1 2583 32 4 5100 48 2 3866 50 5 4742 34 5 3586 31 2 1864 67 4 5037 55 2 4070 50 2 3605 37 2731 67 5 5345 40 2 3348 55 5370 66 4 4764 52 3890 51 3 4110 62 3 4705 25 3 4208 64 4157 48 4 4219 22 3 3579 27 1 2477 29 4 3890 33 2 2514 39 2972 Household Amount Charged ($) Income Income Household Amount ($1000s) Size ($1000s) Size Charged ($) 65 4214 35 1 3121 63 4 4965 39 4 4183 42 4412 54 3 3730 21 2 2448 23 6 4127 44 1 2995 27 2 2921 37 5 4171 26 7 4603 62 6 5678 61 2 4273 21 3 3623 30 2 3067 55 7 5301 22 4 3074 42 2 3020 46 5 4820 41 7 4828 66 5149
Consumer Research, Inc., is an independent agency that conducts research on consumer attitudes and behaviors for a variety of firms. In one study, a client asked for an investigation of consumer characteristics that can be used to predict the amount charged by credit card users. Data were collected on annual income, household size, and annual credit card charges for a sample of 50 consumers. The following data are contained in the file Consumer.
Source: Consumer Research, Inc. (https://www.bbb.org/us/ny/rochester/profile/secretshopper/consumer-research -inc-0041-45625697) Managerial Report
1. Use methods of
2. Develop estimated regression equations, first using annual income as the independent variable and then using household size as the independent variable. Which variable is the better predictor of annual credit card charges? Discuss your findings.
3. Develop an estimated regression equation with annual income and household size as the independent variables. Discuss your findings.
4. What is the predicted annual credit card charge for a three-person household with an annual income of $40,000?
5. Discuss the need for other independent variables that could be added to the model. What additional variables might be helpful?
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 5 images
