Page 103 - Statistics II for Dummies

Chapter 5: Multiple Regression with Two X Variables 87

Table 5-1 Advertising Dollars and Sales of Plasma TVs
Location Sales (In TV Ads (In Newspaper Ads
Millions of Thousands of (In Thousands of
Dollars) Dollars) Dollars)
1 9.73 0 20
2 11.19 0 20
3 8.75 5 5
4 6.25 5 5
5 9.10 10 10
6 9.71 10 10
7 9.31 15 15
8 11.77 15 15
9 8.82 20 5
10 9.82 20 5
11 16.28 25 25
12 15.77 25 25
13 10.44 30 0
14 9.14 30 0
15 13.29 35 5
16 13.30 35 5
17 14.05 40 10
18 14.36 40 10
19 15.21 45 15
20 17.41 45 15
21 18.66 50 20
22 17.17 50 20

In reviewing this data, the question is whether the amount of money spent on
these two forms of advertising can do a good job of estimating sales (in other
words, are the ads worth the money?). And if so, do you need to include
spending for both types of ads to estimate sales, or is one of them enough?
Looking at the numbers in Table 5-1, you can see that higher sales may be
related at least to higher amounts spent on TV advertising; the situation with
newspaper advertising may not be so clear. So will the final multiple regression
model contain both x variables or only one? In the following sections, you
can find out.

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