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Suppose that we build a multiple linear regression model for company revenue (in millions of dollars), with predictors R&D spending (in millions of dollars), advertising
Suppose that we build a multiple linear regression model for company revenue (in millions of dollars), with predictors R&D spending (in millions of dollars), advertising (in millions of dollars), and product rating (on a 1 to 10 scale). The estimated multiple regression model is:
Revenue = 6.7 + 1.2 (R&D) + 0.8 (Advertising) + 3.7 (Rating).
Which of the following is the best interpretation of the coefficient for the product rating?
- A higher product rating is associated with lower company revenue, when R&D spending and advertising is held fixed.
- There is no effect of product rating on revenue.
- A higher product rating is associated with higher revenue, when R&D spending and advertising are held fixed.
- A higher product rating is associated with higher revenue.
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