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(b) You have been asked by a car dealership located in London to model their monthly sales (SALES) as a function of how much is
(b) You have been asked by a car dealership located in London to model their monthly sales (SALES) as a function of how much is spent on advertising (ADV) and the average price of the cars (P) each month. You decide to estimate the following regression model using the historical database of the dealership over the period November 2007 - July 2021. SALES: = {in + 31AM: + pZADVH + 1341-} + u. (i) Given the sample regression function below, interpret the effect of current month's advertising on current month's sales. Conduct a test of overall signicance of the model. The standard errors are in parentheses. SKIES) = 3253.67 + 179.315.1014 + 4260.86ADVt_1 2010.623: (452.01) =(932.11) (316.39) (183.27) n = 164 R2 = 0.72 =(5 Marks) (ii) You also separately estimate the following exponential trend model for cars sales. Interpret how the series SALES is trending over time. logC'fHESt) = 3.46 + 0.0281: (2 Marks)
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