(Solution Download) Use the best-fitting regression model to estimate the weekly quantity of milk consumed after the...


According to CNN, two dairy farmers

 

challenged the legality of the funding of the ?Got Milk?? campaigns.

 

They argued that the ?Got Milk?? campaigns do little to support milk

 

from cows that are not injected with hormones and other sustainable

 

agriculture products, and therefore violate their (and other farmers?)

 

First Amendment rights. The 3rd U.S. Circuit Court of Appeals agreed and

 

concluded that dairy farmers cannot be required to pay to fund the

 

advertising campaigns. One of the obvious backlashes to the National

 

Dairy Promotion and Research Board is reduced funding for advertising

 

campaigns. To assess the likely impact on milk consumption, suppose that

 

the National Dairy Promotion and Research Board collected data on the

 

number of gallons of milk households consumed weekly (in millions),

 

weekly price per gallon, and weekly expenditures on milk advertising (in

 

hundreds of dollars). These data, in forms to estimate both a linear

 

model and log-linear model, are available online at www.mhhe.com/baye7e

 

in a file named Q20.xls. Use these data to perform two regressions: a

 

linear regression and a log-linear regression. Compare and contrast the

 

regression output of the two models. Comment on which model does a

 

better job fitting the data. Suppose that the weekly price of milk is

 

$3.10 per gallon and the National Dairy Promotion and Research Board?s

 

weekly advertising expenditures falls 25 percent after the court?s

 

ruling to $100 (in hundreds). Use the best-fitting regression model to

 

estimate the weekly quantity of milk consumed after the court?s ruling.

 







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