The effect of multiple dummies on sales
The brewery also distributed manufacturer coupons, offering price reductions for Hoppiness. A third marketing strategy was to combine display and coupon activity to increase volume sales.
This time, you will calculate the mean of log(SALES) for each DISPLAY, COUPON, and DISPLAYCOUPON level combination by using the function aggregate(). You can do this by successively adding the variables to the formula argument.
To describe the effects of coupon and display activity, you again estimate a linear response model by using the function lm(). As usual, you investigate the coefficients.
This exercise is part of the course
Building Response Models in R
Exercise instructions
- Calculate the mean of
log(SALES)for eachDISPLAY,COUPON, andDISPLAYCOUPONlevel combination. - Explain
log(SALES)byDISPLAY,COUPON, andDISPLAYCOUPON. Use the functionlm()and assign the result again to an object calleddummy.model. - Obtain the coefficients of the
dummy.modelby using the functioncoef().
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Mean log(SALES)
___(___ ~ ___ + ___ + ___, FUN = ___, data = sales.data)
# Explain log(SALES) by DISPLAY, COUPON and DISPLAYCOUPON
dummy.model <- ___(___ ~ ___ + ___ + ___, data = sales.data)
# Obtain the coefficients