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A marketing director would like to estimate the effect of advertising expenditures (AE) on the quantity of his product sold (Q) controlling for the effects
A marketing director would like to estimate the effect of advertising expenditures (AE) on the quantity of his product sold (Q) controlling for the effects of price (P) and average household income (1) in the area. The director also would like to control for whether the store was in the Northeast region, Southeast region; Midwest region, or Western region. He should include: A) separate (0,1) dummy variables for each of the four regions. B) a dummy variable with values of 0 for the Northeast, 1 for the Southeast, 2 for the Midwest, and 3 for the West. (C) separate (0,1) dummy variables for three of the regions, keeping one region out of the regression as a control
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