J.C.Riley owns Riley's Auto Repair Shop.J.C.is trying to determine whether the company's advertising program is successful.He has used a spreadsheet program to estimate the relationship between advertising expenditures and sales dollars.Monthly data for the past two years were entered into the program.The regression results indicated the following:
Sales dollars = $169,000 - ($200 × Advertising expenditures)
Correlation coefficient = -.864
To J.C. ,the results imply that advertising is actually reducing sales.Can you help explain to him what might cause the negative relationship between advertising expenditures and sales?

Question

J.C.Riley owns Riley's Auto Repair Shop.J.C.is trying to determine whether the company's advertising pro­gram is successful.He has used a spreadsheet program to estimate the relationship between advertising expenditures and sales dollars.Monthly data for the past two years were entered into the program.The regression results indicated the following:
Sales dollars = $169,000 - ($200 × Advertising expenditures)
Correlation coefficient = -.864
To J.C. ,the results imply that advertising is actually reducing sales.Can you help explain to him what might cause the negative relationship between advertising expendi­tures and sales?

Quizplus · Accepted Answer

The Answer of J.C.Riley owns Riley's Auto Repair Shop.J.C.is trying to determine whether the company's advertising pro­gram is successful.He has used a spreadsheet program to estimate the relationship between advertising expenditures and sales dollars.Monthly data for the past two years were entered into the program.The regression results indicated the following:
Sales dollars = $169,000 - ($200 × Advertising expenditures)
Correlation coefficient = -.864
To J.C. ,the results imply that advertising is actually reducing sales.Can you help explain to him what might cause the negative relationship between advertising expendi­tures and sales?

JCRiley Owns Riley's Auto Repair Shop