Holt's model differs from simple exponential smoothing in that it includes a term for

- the span of a moving average is short - say, 3 months - then few observations go into each average, and extreme values have relatively large effect on the forecasts

In amultiplicative seasonal model, we multiply a "base" forecast by an appropriate seasonal index. These seasonal components typically average to 0.

A vacation resort has collected data on 150 resort guests to study their spending behavior. In particular, they are interested in whether their rewards program increases guest spending. Their data set includes the amount each guest spent during their 3-day stay, whether the guest traveled from out of state, number of children, number ofprevious stays, age, and whether the guest brought any pets or is a member of the resort's rewards program.

(1) Needs help to build a dummy variable for rewards program membership and run a simple linear regression model with this variable.Interpret your regression coefficient.

(2) Interprettheof your regression.

(3) needs help to build suitable dummy variables for the remaining non-numeric variable in the data set. Run a multiple regression model which includes all explanatory variables from the data file. Interpret all regression coefficients that are significant at the 5% level.

(4) Which model would you choose? Explain the choice.

(5) Since your spending variable is a little bit skewed to the right, you decide to use the natural logarithm of spending as your dependent variable instead. Create this variable and estimate a multiple regression model with all explanatory variables. Interpret the regression coefficient for the resort's rewards program.

A C E F H Guest Out of state No of children of previous visits Age Pets Rewards member Purchases O Q ISCECECEEN FELLEELEEREE C OUR UNI 26 Yes No Viuest $1,380 Age Pets Rewards Purchases 38 No 35 No No $1,250 31 35 No No $1, 150 40 No No No $1,328 32 $1,080 33 44 No 34 43 Yes No $1,416 46 No No $1,240 28 Yes No $1,450 No $1,552 24 No 27 No No $1,220 35 42 No No $1,372 No $1,750 47 No No $1,400 33 Yes 62 No No 25 No Yes $1,384 No $1,080 31 No No $1,360 30 No $1,140 51,180 40 No No No $1,180 34 No No $1,072 26 Yes 32 No No $1,530 37 No No No $1,368 37 No 58 No No $1,252 No $1,248 51 No $1,388 35 No No $1,744 Yes $1,540 33 No No $1,620 37 No 44 No No $1,320 27 No No $1,490 No $1,812 30 No 37 No No No $1,080 53 Yes 40 No No $1,552 No $1, 196 44 No 29 No No $1,184 $1,304 51 Yes No $1,184 42 No No ST,248 36 No 53 No No $1,360 58 Yes No $1,218 28 Yes No No $1,180 $1,410 44 No No $1,420 45 No Yes $1,360 33 Yes No $1,140 31 No No $1,164 24 Yes No $1,390 64 No No 27 Yes No $1,230 47 No $1, 186 No $1, 168 60 No No $1,180 No $1,688 37 No 46 No Yes $1,192 48 No 40 No No No $1,504 $1,360 SEEEEEEEEEEEEEEEEGREECELET 55 No No $1,340 39 No No $1,360 33 No INO $1,320 No 51 No $1,184 No $1,360A B C D E F G H Guest 121 Out of state No of children of previous visits Age Pets Rewards member Purchases 122 59 No No 123 29 Yes $1,348 No 124 27 No $1,452 Yes 125 30 No $1,520 34 No No $1,580 126 No $1,436 127 35 No No 128 50 No $1,300 No $1,480 129 33 No No $1,304 130 26 No 36 No No $1,440 33 No No $1,400 47 No Yes $1, 744 No $1,352 134 51 No No $1, 612 136 31 Yes No $1,412 135 42 No No 137 62 No $1,580 46 Yes No $1, 740 138 $1,680 139 60 No No 140 43 Yes No $1,612 53 No No $1,760 141 No 142 38 No $1,592 No 39 No $1,588 143 No 35 No $1,800 144 40 No No No $1, 756 145 $1,520 146 32 No 147 33 Yes No $1,561 No 148 30 Yes $1,780 No $1,980 149 37 Yes 30 Yes No $1,760 150 No 32 No $1,760 NO $1,860A B C D E F Guest G Out of state No of children of previous visits H K Age Pets Rewards member Purchases M N O P Guest Q 61 62 37 No No Out of staf children ious visits Age Pets Rewards Purchases 63 30 Yes $1,490 No No $1,320 91 EEEEEEEEEEEEEEEEREBBESEESI 26 No $1,144 92 4/|NO 93 51 No Yes $1,528 No 41 No $1,412 34 No Yes Yes $1,440 $1,492 94 26 Yes No $1,380 57 Yes No 95 33 No 27 Yes No $1,220 No 53 No $1, 196 $1,200 32 No No $1,260 96 97 34 No 29 No Yes $1,492 No 44 No Yes $1,656 98 CONENCE 25 Yes No 27 Yes No $1,608 $1,420 31 No No $1,310 $1,340 99 43 No No $1,400 No $1,280 100 36 No 38 No No $1,520 50 No No $1,232 102 60 No No 47 No $1,412 No 35 Yes Yes $1,680 $1,364 43 No No No $1,570 103 ST,300 104 43 No 48 No Yes $1, 728 No $1,444 46 No No 35 Yes No $1,268 105 106 32 No $1,460 107 31 Yes $1,384 No 29 No No 22 Yes $1,890 No $1,320 No 58 No No $1,248 108 $1,448 40 No 109 35 No 37 No No $1,500 No $1,360 No 30 No $1,640 No $1,320 III 43 No 33 No No $1,424 29 No No $1,575 112 58 No No 31 No $1,592 32 Yes Yes No $1,560 $1,397 113 114 44 No Yes $1,652 33 Yes No No $1,560 115 37 No 48 No Yes $1, 700 $1,832 49 No No No $1,396 34 No 26 Yes No $1,360 $1,276 116 IT7 26 Yes Yes $1, 792 28 Yes No No $1,480 $1,360 118 25 No 38 No No No $1,520 90 35 No $1,456 120 41 No 29 Yes No $1,400 NO $1,600 INo $1,440