A researcher is interested in predicting whether a company might attempt to buy out a competitor (score = 1) or not (score = 0), using market share (%) as an independent variable. She establishes that the value of 'exp(B)' is 2.56. How should she interpret this?
A) If two companies have a market share that differs by 1 unit, then the odds of the company with the higher score attempting a takeover are 2.56 higher than for the other company.
B) 2.56 times more companies who attempted takeovers scored highly on market share.
C) If two companies have market share scores that differ by 1 unit, then the odds of the company with the higher score attempting a takeover are 2.56 lower than for the other company.
D) Takeover rates are 2.56 times as high in companies with a large share of their market.

Question

Quizplus · Accepted Answer

The value of 'exp(B)' represents the odds ratio. A value of 2.56 indicates that for every 1-unit increase in market share, the odds of attempting a takeover are 2.56 times higher. So, if two companies have market share scores that differ by 1 unit, the odds of the company with the higher score attempting a takeover are 2.56 times higher than for the other company.

A Researcher Is Interested in Predicting Whether a Company Might