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Rent-a-Car is one of the two car rental agencies serving a small regional airport in the U.S. Midwest. Forty per cent (40%) of its customers

Rent-a-Car is one of the two car rental agencies serving a small regional airport in the U.S. Midwest. Forty per cent (40%) of its customers are airline passengers and the remaining sixty per cent (60%) are dwellers of the small nearby college town who use rental cars for business and leisure trips. The airport is within two miles from campus and approximately six miles from the city center. It is easy to reach by car, taxi, or city bus. You are a manager of Rent-a-Car. Your fleet consists of 72 cars, of which 47 fall into the economy class and 25 in the luxury class. Whenever demand for cars in some class exceeds the number of cars available, additional vehicles can be delivered from the nearest company hub in the state capital 70 miles away. Alternatively, some customers unable to rent an economy-class car may be upgraded to a luxury-class car at no extra cost to them. Your only competitor at this location has a more sophisticated system of car category tiers, which consist of Compact, Economy, Mid-size, and Large cars. Assignment: Part 1 In order to better understand your units operating environment, you are asked to provide an estimate of the demand equation that would account for various factors that affect your customer traffic. Estimating the demand equation is useful for future analysis of your units performance. You need to request the data for your empirical study. Specifically, (1) What are you planning to use as the dependent variable in your regression? (2) What other data would you need and can realistically get? You may request information for up to five independent variables.

For each variable you request, provide reasons why you expect it to be important for your analysis and explain the expected sign of the relationship between the proposed independent variable and the dependent variable. Assignment: Part 2 After you have prepared your request, access the data file provided and see what variables you have data for. Then estimate the demand function for Rent-a-Car using regression techniques. Submit a report (Word document) and your analysis (Excel file) for grading. Your report must include separate sections on your initial request for variables (Part 1 above) and any modifications or substitutions you needed to make based on the variables that were available. You will be assessed based on the case that you present as well as your analysis. Make sure you include an interpretation of all coefficients if your estimated demand function.

Description of variables in the Rent-a-Car data set
PownE Average daily rate Rent-A-Car charged for its economy cars in a given week
PownL Average daily rate Rent-A-Car charged for its luxury vehicles in a given week
Pcomp Average daily rate of the only competitor across all vehicle categories
Session Binary variable with 1 indicating weeks when college is in session
Weather Number of days in a week with severe weather
Unemployment Number of unemployed workers in the county as of Tuesday each week
FlghtWk Number of flights (in- and outbound) serving the local airport that week
CancWk Total number of flights cancelled that week
Holiday Binary variable with 1 indicating weeks of national holidays (long weekends)
Wrecks Number of major accidents that week
Discount Number of customers in a given week using the 15 percent discount off the base rate offered through our affiliate partner, a credit card company
Upgrade Number of customers who received a free upgrade to a luxury vehicle due to the unavailability of economy vehicles
TotalAd Amount spent on local advertising each week
AdBlbd Weekly spending on billboard ads
AdPaper Weekly spending on ads in local newspapers, including the online version
AdTV Weekly spending on ads placed with local TV
QE Number of rental contracts initiated each week in the economy category
Q_length Number of paid days of rentals, grouped by the agreement starting date
Age<25 Number of rental agreements in a given week for which the person listed as the primary driver on the rental agreement was less than 25 years old
Age25_50 Number of rental agreements for which the person listed as the primary driver on the rental agreement was between 25 and 50 years of age
Age51+ Number of rental agreements in a given week for which the person listed as the primary driver on the rental agreement was 51 years of age or older
FleetAge Average age of our fleet measured in weeks
BedTax

Amounts collected from the 1% local hospitality tax in the county - this information is reported only on a monthly basis

Week PownE PownL Pcomp Session Weather Unempl FlghtWk CancWk Holiday Wrecks Discount Upgrades TotalAd AdBlbd AdPaper AdTV QE Q_length Age <25
1 29.99 37.99 37.75 0 4 701 41 9 0 22 12 8 430 430 0 0 87 334 9
2 29.99 41.99 41.5 0 1 739 41 2 0 16 7 0 430 430 0 0 76 327 13
3 24.99 26.99 35.25 0 2 814 41 3 0 12 6 5 430 430 0 0 82 315 20
4 28.99 37.99 35.5 1 1 880 47 0 1 6 8 2 430 430 0 0 77 275 24
5 24.99 36.99 24.5 1 0 881 47 0 0 10 10 0 430 430 0 0 76 316 20
6 29.99 43.99 28.75 1 3 799 47 6 0 17 2 4 430 430 0 0 78 301 15
7 28.99 44.99 34.5 1 1 857 47 0 0 20 3 1 815 815 0 0 81 355 14
8 21.99 25.99 33 1 0 871 47 0 0 4 1 8 815 815 0 0 91 332 20
9 26.76 48.99 29.5 1 0 870 47 0 0 12 1 0 815 815 0 0 77 260 20
10 28.99 42.99 38.25 1 2 889 47 3 0 19 9 1 815 815 0 0 84 317 22
11 25.99 37.99 28 1 0 855 47 0 0 9 4 1 2197 815 1382 0 76 291 14
12 25.99 37.99 30.25 1 0 911 48 2 0 4 5 0 2520 815 1705 0 75 350 10
13 25.99 28.99 31.5 1 0 894 48 0 0 15 1 0 1646 815 831 0 68 448 22
14 24.99 38.99 28.5 0 0 909 48 0 0 5 11 0 815 815 0 0 89 481 38
15 24.99 40.99 30.25 1 1 956 48 0 0 12 6 11 815 815 0 0 68 261 21
16 23.99 34.99 28.25 1 0 988 48 0 0 8 5 0 815 815 0 0 63 227 16
17 30.99 41.99 36 1 0 983 48 0 0 9 6 0 815 815 0 0 52 186 9
18 24.99 41.99 30.5 1 1 938 62 3 0 1 10 7 815 815 0 0 94 405 20
19 26.99 41.99 31 1 0 939 62 0 0 1 0 1 815 815 0 0 78 314 14
20 25.99 45.99 32 1 0 948 62 0 0 3 3 3 1455 815 640 0 87 338 12
21 26.99 45.99 32.5 1 0 902 64 0 0 7 4 0 4965 815 640 3510 70 248 19
22 29.99 45.99 31 0 2 888 64 1 0 17 5 3 4325 815 0 3510 86 287 27
23 29.99 41.99 33.75 0 0 937 64 1 0 12 5 0 4325 815 0 3510 68 264 21
24 29.99 41.99 31.25 1 0 953 64 0 0 12 11 2 4325 815 0 3510 84 405 15
25 24.99 41.99 32.5 1 0 983 58 0 0 8 9 2 4325 815 0 3510 86 374 15
26 28.99 40.99 34.75 1 0 988 58 2 0 9 6 4 4325 815 0 3510 84 458 9
27 24.99 46.99 33 1 0 995 58 0 1 11 11 4 4325 815 0 3510 92 400 10
28 29.99 40.99 31.5 0 0 961 58 0 0 2 3 0 4325 815 0 3510 81 459 11
29 28.99 37.99 37.75 1 0 996 58 0 0 6 6 2 4325 815 0 3510 85 396 14
30 27.99 37.99 37.5 1 0 945 58 0 0 1 8 2 4018 508 0 3510 89 458 14
31 29.99 37.99 37.25 1 0 986 59 0 0 5 8 0 6268 508 0 5760 80 344 16
32 26.99 40.99 31 1 1 953 59 0 0 5 5 0 4018 508 0 3510 80 269 17
33 30.99 39.99 37.25 0 0 989 59 3 0 6 3 5 4018 508 0 3510 85 332 15
34 31.99 46.99 38.25 0 0 1031 59 0 0 13 10 0 4018 508 0 3510 77 303 22
35 30.99 46.99 31.25 1 0 1042 59 0 0 5 8 0 4853 508 835 3510 67 297 23
36 27.99 38.99 32.25 1 0 1023 59 0 1 2 9 2 3477 508 835 2134 81 478 14
37 28.99 40.99 37 1 0 1045 61 0 0 7 6 1 4485 508 1843 2134 84 263 21
38 29.99 37.99 38.75 1 0 1065 61 0 0 11 6 0 2642 508 0 2134 78 367 20
39 30.99 41.99 37.75 1 0 1037 61 0 0 15 3 0 2642 508 0 2134 71 263 22
40 30.99 42.99 39.5 1 0 1052 61 0 0 11 11 1 2642 508 0 2134 77 222 14
41 26.99 41.99 31 1 0 1055 61 0 0 12 9 3 508 508 0 0 89 279 9
42 31.99 38.99 31.25 1 1 1071 61 3 0 12 2 0 508 508 0 0 71 343 16
43 34.99 39.99 35 0 0 1104 61 0 0 11 4 0 1237 1237 0 0 61 294 16
44 28.99 40.99 35.75 1 0 1145 61 0 0 7 8 0 1237 1237 0 0 72 349 14
45 25.99 41.99 37.5 1 0 1157 61 0 0 6 3 4 3117 1237 0 1880 101 441 14
46 34.99 46.99 31.5 1 0 1136 61 0 0 9 0 0 1237 1237 0 0 52 215 16
47 25.99 37.99 33.25 1 2 1140 61 2 1 15 2 5 1237 1237 0 0 103 388 17
48 28.99 42.99 39.5 1 0 1146 58 2 0 12 9 0 1237 1237 0 0 75 354 12
49 27.99 45.99 37 1 2 1156 58 4 0 14 1 0 3852 1237 0 2615 95 372 7
50 34.99 40.99 30.5 1 0 1166 53 0 0 18 11 2 1237 1237 0 0 73 452 9
51 34.99 39.99 30 0 1 1175 53 0 0 21 2 7 1237 1237 0 0 89 362 15
52 26.99 41.99 35.25 0 0 1155 53 0 1 6 7 0 1237 1237 0 0 82 353 14

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