Home Appliance Sales
BA/EC 311 – QUANTITATIVE ANALYSIS
BIRMINGHAM-SOUTHERN COLLEGE
HOME APPLIANCE SALES
You are the Vice President for Builder Sales for Kenmore appliances. Your job is to oversee the sales program that markets Kenmore appliances to home builders. These builders of course need appliances for new homes that are built. About four years ago, you began a new incentive program to encourage builders to place Kenmore appliances in newly constructed homes. You have collected data to analyze the effectiveness of this program (see Excel file below). The variables in your study are:
Qua – Quarterly data.
Sales – builder sales of Kenmore appliances.
Resales – percentage of home sales that are not new construction.
Incent – percentage of home builders eligible for the Kenmore appliance incentive program.
Income – the median income of families in the study area.
Homeval – the value of new homes that were constructed in the study area.
1. Conduct a regression analysis using Sales as your dependent
variable. Incent is your explanatory variable, which you expect to have a
positive effect on sales. All of the other variables are control variables. Don't forget to test for multicollinearity! Interpret your findings.
2. What is your opinion of the success of the new incentive
program?
3. What are your projected sales if the percentage of home
resales and the percentage of home builders eligible for the program are both
at average levels? You’ll need to calculate the descriptive statistics to
answer this.
4. If the number of home resales increases by 10% from the
average, what is the effect on sales of Kenmore appliances?
Save your work as a word doc and post on Moodle.