Question

The owner of a pizzeria wishes to build a model relating revenues to advertising expenditures into three categories. which independent variable is the least significant in this regression relationship?

Answer 1

Newspaper

Explanation:

The level or degree of significance of independent variables used in a multiple regression analysis is usually measured by comparing the values of the slope Coefficient of each independent variable. From the result of the multiple regression analysis attached. The slope Coefficient of each independent variable is :

Television = 2.38 ; Newspaper = 1.45 and Mail = 1.82.

This slope values are the rate at which the dependent variable changes per unit increase in each of the independent variable.

Newapaper has the least slope Coefficient value of the 3 independent variables and hence will have the least significant effect on the value of revenue.