Koala Case Teaching Note

Pre-Processing
In Regression, Dummy Variables have to be dichotomous. In this case, Celebrity Endorsement takes 3 values: 1, 2, 3. 1: By a Sports person; 2: By a Film Star; 3: No Celebrity Endorsement

Q. How do we handle Celebrity Endorsement? Do we need to make any changes to the data? Process the data before importing into SPSS.

Correlation
Q. We will generate Pearson Correlation Coefficients? Any assumptions on the scale of the variables?
1. Analyze > Correlate > Bivariate 2. Select all the variables Correlations S Pearson Correlation Sig. (2-tailed) N Pearson Correlation Sig. (2-tailed) DM Pearson Correlation Sig. (2-tailed) CompSF Pearson Correlation Sig. (2-tailed) CoSF Pearson Correlation Sig. (2-tailed) TI Pearson Correlation Sig. (2-tailed) Ads Pearson Correlation Sig. (2-tailed) S 1.00 N 0.99 0.00 1.00 DM 0.99 0.00 0.99 0.00 1.00 CompSF CoSF 0.98 0.00 0.97 0.00 0.98 0.00 1.00 0.96 0.00 0.97 0.00 0.96 0.00 0.97 0.00 1.00 TI 0.99 0.00 0.98 0.00 0.98 0.00 0.98 0.00 0.97 0.00 1.00 Ads 0.99 0.00 0.97 0.00 0.98 0.00 0.98 0.00 0.94 0.00 0.97 0.00 1.00

0.99 0.00 0.99 0.00 0.98 0.00 0.96 0.00 0.99 0.00 0.99 0.00

0.99 0.00 0.97 0.00 0.97 0.00 0.98 0.00 0.97 0.00

0.98 0.00 0.96 0.00 0.98 0.00 0.98 0.00

0.97 0.00 0.98 0.00 0.98 0.00

0.97 0.00 0.94 0.00

0.97 0.00

Q. Your comments on the correlation between S and the other variables?

Q. Your comments on the correlation among the independent variables?

Regression without the DUMMY Variables

1. Analyze > Regression > Linear 2. Select the Dependent and Independent variables; Method: Enter 3. Statistics: Estimation; Confidence Interval; Model Fit; Collinearity Diagnostics; DurbinWatson 4. Save: 5. Options: Include constant; Exclude cases listwise Model Summary
Adjusted R Square .994 Std. Error of the Estimate 1.555

Model 1

R .998(a)

R Square .996

Durbin-Watson 1.994

Q. What can you say about autocorrelation? Q. Can we use the regression equation for estimation? Q. How is R2 related to the cells in the ANOVA Table below? Q. How is se related to the cells in the ANOVA Table below? Q. What do you understand by Standard Error of Estimate, se? Q. Explain the difference between R2 and Adjusted R2?
ANOVA
Model Regression Residual Total Sum of Squares 11689.241 50.759 11740.000 df 6 21 27 Mean Square 1948.207 2.417 F 806.013 Sig. .000(a)

Q. What is the general Regression Model? Q. How do we represent the estimated regression equation? Q. What do you understand by SSR. SSE, SST? Q. How are the Degrees of Freedom computed?

Q. How is F computed? Q. What is the Hypotheses being tested here? Q. What is your conclusion?

Coefficients(a) Model Unstandardized Coefficients B (Constant) N DM CompSF CoSF TI Ads Std. Error

Standardized t Coefficients Beta 0.179 0.150 2.100 -0.442 0.404 2.322 6.234

Sig.

95% Confidence Interval for B Lower Bound Upper Bound

Collinearity Statistics Tolerance VIF

3.895 21.776 0.011 0.071 1.539 0.733 -0.007 0.016 0.002 0.004 5.042 2.171 10.874 1.744

0.018 0.235 -0.043 0.030 0.224 0.542

0.860 0.882 0.048 0.663 0.690 0.030 0.000

-41.391 49.180 -0.137 0.159 0.015 3.062 -0.040 0.026 -0.006 0.009 0.526 9.557 7.247 14.502

0.015 0.016 0.021 0.038 0.022 0.027

68.412 60.991 46.787 26.139 45.114 36.774

Q. What are your comments on Multicollinearity? Q. Does the data violate any regression assumptions? Q. Then why bother? Q. Which variables should be dropped from the model?

Factor Analysis with Optimal factors

1. Analyze > Data Reduction > Factor 2. Descriptive: KMO & Bartletts Test of Sphericity 3. Extraction: PC; Correlation matrix; Unrotated factor soln; Extract Eigen Values Over 1 4. Rotation: None 5. Score: Save as Variables: Regression; Display Factor Score Coefficient 6. Options: Exclude missing value rows
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. Bartlett's Test of Sphericity Approx. Chi-Square df Sig. .901 420.959 15 .000

Q. Should we go ahead with Factor analysis?

Total Variance Explained Extraction Sums of Squared Loadings Component 1 Total 5.865 % of Variance 97.748 Cumulative % 97.748

Q. How many factors do we expect?

Component Matrix(a) Component 1 N DM CompSF CoSF TI Ads .993 .992 .991 .979 .992 .985

Q. Are all the variables included in the Factor? Q. So what do we do now?

Regression with Factor and the Two Dummy variables

1. 2. 3. 4. 5. Analyze > Regression > Linear Select the Dependent and Independent variables; Method: Enter Statistics: Estimation; Confidence Interval; Model Fit; Collinearity Diagnostics Save: Unflag all Options: Include constant; Exclude cases listwise

Model Summary Model 1 R .994(a) R Square .988 Adjusted R Square .986 Std. Error of the Estimate 2.454

Q. Based on R2, should we go proceed with regression?

ANOVA Model Regression Residual Total Sum of Squares 11595.524 144.476 11740.000 df 3 24 27 Mean Square 3865.175 6.020 F 642.076 Sig. .000(a)

Q. Should we proceed with examining the model? And why?

Model

Unstandardized Coefficients B Std. Error 1.080 0.523 1.304 1.401

Standardized t Coefficients Beta 40.968 1.004 40.003 0.016 0.519 0.032 0.966

Sig.

95% Confidence Interval for B Lower Bound Upper Bound

Collinearity Statistics Tolerance VIF

(Constant) Factor score 1 CE1 CE2

44.227 20.927 0.677 1.353

0.000 0.000 0.608 0.344

41.999 46.455 19.847 22.007 -2.014 3.368 -1.538 4.243

0.815 0.516 0.477

1.227 1.937 2.095

Q. What is the estimated regression equation? Q. What do you understand by Standard Error of the coefficient? Q. What is Beta? And why is it computed? Q. How is the t value computed? Q. What is the sampling distribution? Degrees of Freedom? Q. What are your NULL and Alternative Hypotheses? Q. Using Confidence Intervals, can you answer the previous question? Q. If a cut off of 5 is taken for a VIF, what do you conclude about the independent variables? Q. What is the relation between Tolerance and Variance Inflation Factor? Q. Which variable is influencing the dependent variable the maximum? Q. Is there any variable being rejected by the model? If so, why?