ST 430/514 Introduction to Regression Analysis/Statistics for Management and the Social Sciences II Case Study 1 Legal Advertising–Does it Pay? A Law Suit Two former law partners: one specializes in personal injury (PI); one specializes in workers’ compensation (WC). Advertising focused on PI: Which partner benefited, and which should pay for it? 1 / 4 Case Study 1 Legal Advertising–Does it Pay?
ST 430/514 Introduction to Regression Analysis/Statistics for Management and the Social Sciences II Available data for 48 months: Advertising expenditure; Number of new PI cases; Number of new WC cases. Because the effect of advertising is not immediate, focus was on total expenditure over previous 6 months. 2 / 4 Case Study 1 Legal Advertising–Does it Pay?
ST 430/514 Introduction to Regression Analysis/Statistics for Management and the Social Sciences II Plot the data: legal <- read.table("Text/Cases/LEGALADV.txt", header = TRUE, na.strings = "*") pairs(legal[, c("NewPI", "NewWC", "AdvExp6")]) For each type of case, fit a linear model E ( y ) = β 0 + β 1 x , where y is y PI or y WC , and x is advertising expenditure. Test the significance of the association of y with x . Examine the confidence interval for each slope. 3 / 4 Case Study 1 Legal Advertising–Does it Pay?
ST 430/514 Introduction to Regression Analysis/Statistics for Management and the Social Sciences II Conclusions: The number of new PI cases is significantly related to advertising. The number of new WC cases is not significantly related to advertising. A court ruled that the PI partner should “bear the brunt of the advertising expenditures.” 4 / 4 Case Study 1 Legal Advertising–Does it Pay?
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