Statisctics
Activity 5 – CLO 4, CLO 8, CLO 11, CLO 12

Simmons Company (Simmons)conducted a pilot study using a random sample of customers who have company’s credit card and customers who do not have company’s credit card. Simmons sent the catalog to each of the 100 customers selected. At the end of a test period, Simmons noted whether each customer had used her or his coupon. The sample data for the first 10 catalog recipients are shown in Table 7.

Table 7

Sample Data for the First Ten Catalog Recipients

Customer

Annual Spending ($1000)

Simmons Card

Coupon

1

2.291

1

0

2

3.215

1

0

3

2.135

1

0

4

3.924

0

0

5

2.528

1

0

6

2.473

0

1

7

2.384

0

0

8

7.076

0

0

9

1.182

1

1

10

3.345

0

0

Use the sample data provided in the Table 7 to answer the following questions:

1. Provide descriptive statistics of the data divided according to the divisions in the values of the categorical variable.

2. Develop a logistic regression model in which the probability of using a coupon is the dependent variable. State the hypotheses on the coefficients, justify formulation of these hypotheses, and interpret the results. Use ? = .05. Include all phases of assessment of the model and do not forget to check multicollinearity.

3. Apply the estimated regression equation developed in part b to predict the probability of using a coupon for a combination of values not given in the above table for the independent variables.