Exercise

A linear probability model for beer demand

To see how much of an effect changes in the price ratio have on the purchases probabilities of Hoppiness, you describe the relation HOPPINESS ~ price.ratio by using the function lm(). This time, you also directly graph the estimated model by using the functions plot() and abline().

Instructions

100 XP

Use the function lm() to explain the purchase probabilities for HOPPINESS by price.ratio. Assign the result to an object named probability.model.
Display the relation between HOPPINESS and price.ratio by using the function plot().
Add the model predictions by applying the function abline() to the probability.model object.

Take Hint (-30 XP)