Question

Activity One: Introduction to Regression (Cause v Effect) In each of the following, (i) draw a diagram representing the cause-and-effect relationships described. (ii) What will be a useful tool in each case and why (e.g., correlation; multiple regression; simple linear regression)? (iii) How can the result be used (e.g., to make predictions; to assess impact, etc)? Q1.1) A location analysis is completed by the owner of Beauty Juicies, a retail outlet that sells fresh juice. The franchise owner helps potential franchisees by looking at potential profitability for locations, given the locations characteristics such as distance to public transport, opening hours of retail complex, distance from another Beauty Juicies, number of other outlets selling fresh juice in retail complex. Q1.2) The Beauty Juicies owner wants to know whether the profitability of the location can be predicted by its linear relationship with the distance the store is to a significant public transport hub. It wishes to run regression with the two variables, but not include any other variable. Do you think they will make better or worse predictions than the model considered in your previous answer? Q1.3) The Beauty Juicies owner wants to know whether the price of carrots is linearly related to the price of other vegetables and/or fruit such as beetroot, tomato, and pineapples.

Answer 1