How to lag?
Possibly, customers do not immediately react to price reductions of Hoppiness. Therefore, it is important to check if the effect of price promotion might extend to the next week. You can do this by adding lags into your model.
Lagging a variable means shifting the time base back by a given number of observations. This can be done by using the function lag()
. The lag()
function takes only one argument; n = 1
, by default for defining the number of periods to be shifted.
You apply lag()
on PRICE
and compare the result to the original PRICE
by using the function cbind()
. To display only the first six elements of the data columns, you can use the function head()
.
This is a part of the course
“Building Response Models in R”
Exercise instructions
- Calculate a lagged
PRICE
variable by using the functionlag()
. - Compare the lagged
PRICE
variable to the originalPRICE
variable by using the functionscbind()
andhead()
.
Hands-on interactive exercise
Have a go at this exercise by completing this sample code.
# Compare lagged PRICE to original PRICE
___(___(sales.data$PRICE, ___(sales.data$PRICE)))