Demand Estimation by Regression Method – Some Statistical Concepts for application ( All the formulae marked in red for remembering. The rest is for your concept)

In case of demand estimation working with data on sales and prices for a period of say 10 years may lead to the problem of identification. In such a case the different variables that may have changed over time other than price, may have an impact on demand more rather than price. In order to void this problem of identification what we adopt is the techniques of demand estimation through regression process in order to distinguish the effects of different variables on demand. In order to understand the basic working and application of the model, let us start with two variable model

Two-variable Regression model
To find out the relation between two variables X & Y, usually a linear relation is estimated. If it is non-linear one then we convert it into log-linear to estimate the equation. Among the scatter of points in plane X-Y, we try to fit in the best line that can estimate the relationship. Here Y is the dependent variable and X is the independent variable. Let us take the example given in Salvatore. Let demand be the function of advertisement expenditure by the particular firm. Then the scatter diagram will show as the ad. Exp. Increases the sales volume will rise. In order to estimate the relationship of Sales (Y), on ad. Exp. (X), we regress the following equation,

In order to establish this relation we need to estimate a and b with the help of the data set on Y and X. we use a technique called ordinary least squares technique in order to find out the best fitted line. In order to do so, we minimize the sum of squared errors (measure of overall variation of estimated sales from observed sales), assuming that the sum of error is equal to zero. Thus the error is given by,

Thus we need to minimize the above in such a way that the estimated values minimize the above error variance....

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Unit 5 – RegressionAnalysis
Mikeja R. Cherry
American InterContinental University
Abstract
In this brief, I will demonstrate selected perceptions of the company Nordstrom, Inc., a retailer that specializes in fashion apparel with over 12 million dollars in sales last year. I will research, review, and analyze perceptions of the company, create graphs to show qualitative and quantitative analysis, and provide a summary of my findings....

...
DemandEstimation
Seydou Diallo
Strayer University
ECO 550: Managerial Economics
Dr. Fereidoon Shahrokh
November 4, 2014
Background
I work for Snack-Eeze. We are the leading brand of low-calorie, frozen microwavable food. We estimate the following demand equation for our product using the data from 26 supermarkets around the country for the month of April.
QD = -2,000 - 100P + 15A + 25PX + 10I
(5,234) (2.29) ...

...
DemandEstimation
Dhruvang kansara
Eco 550, Assignment 1
Professor: Dr, Guerman Kornilov
January 27, 2014
1. Compute the elasticity for each independent variable. Note: Write down all of your calculations.
According to our Textbooks and given information, When P = 8000, A = 64, PX = 9000, I = 5000, we can use regression equation,
QD = 20000 - 10*8000 + 1500*64 + 5*9000 + 10*5000 = 131,000
Price elasticity =...

...Introduction
This presentation on RegressionAnalysis will relate to a simple regression model. Initially, the regression model and the regression equation will be explored. As well, there will be a brief look into estimated regression equation. This case study that will be used involves a large Chinese Food restaurant chain.
Business Case
In this instance, the restaurant chain's management wants to...

...RegressionAnalysis Exercises
1- A farmer wanted to find the relationship between the amount of fertilizer used and the yield of corn. He selected seven acres of his land on which he used different amounts of fertilizer to grow corn. The following table gives the amount (in pounds) of fertilizer used and the yield (in bushels) of corn for each of the seven acres.
|Fertilizer Used |Yield of Corn...

...Park University
Multiple RegressionAnalysis
Pamela Lima
EC315 Quantitative Research Methods
Dr. Bell
11/22/2013
Multiple RegressionAnalysis
Miami Heat Average Attendance per season
Miami Heat History
The Miami Heat is a professional basketball team, based in Miami, Florida. The team is a member of the Southwest Division in the Eastern Conference of the National Basketball Association (NBA). The Miami...

...REGRESSIONANALYSIS
Correlation only indicates the degree and direction of relationship between two variables. It does not, necessarily connote a cause-effect relationship. Even when there are grounds to believe the causal relationship exits, correlation does not tell us which variable is the cause and which, the effect. For example, the demand for a commodity and its price will generally be found to be correlated, but the question whether...

...data the most? Which forecast responds to change the best? [4]
Problem 2 [4]
Given the following data, use exponential smoothing (( = 0.3) to develop a demand forecast. Assume the forecast for the initial period is 5.
|Period 1 2 3 4 5 6 |
|Demand 7 9 5 9 13 8 |
Problem 3 [6]
Calculate (a)...

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