Refer to the previous exercise for a description of the data set. Estimate the logit model where the Under Armour purchase depends on age.

a. Compute the predicted probability of an Under Armour purchase for a 20-year-old customer and a 30-year-old customer.

b. Test Annabel’s belief that the Under Armour brand attracts a younger customer, at the 5% level.

previous exercise data

Annabel, a retail analyst, has been following Under Armour, Inc., the pioneer in the compression-gear market. Compression garments are meant to keep moisture away from a wearer’s body during athletic  activities in warm and cool weather. Annabel believes that the Under Armour brand attracts a younger customer, whereas the more established companies, Nike and Adidas, draw an older clientele. In order to test her belief, she collects data on the age of the customers and whether or not they purchased Under Armour (1 for Under Armour, 0 otherwise). A portion of the data is shown in the accompanying table

Transcribed Image Text:

Under Armour Age 1 30 19 24