Stuart Wainwright, the vice president of purchasing for a large national retailer, has asked you to prepare an analysis of retail sales by state. He wants to know if the percent of unemployment for males and for females and the per capita disposable income are jointly related to the per capita retail sales. Data for this study are in the data file named Economic Activity; the variables are described in the Chapter 11 appendix. You may have to compute additional variables using the variables in the data file.
a. Prepare a correlation matrix, compute descriptive statistics, and obtain a regression analysis of per capita retail sales on unemployment and personal income. Compute 95% confidence intervals for the slope coefficients in each regression equation.
b. What is the conditional effect of a $1,000 decrease in per capita income on per capita sales?
c. Would the prediction equation be improved by adding the state population as an additional predictor variable?