Multivariate correlation & Regression (MRP Biscuits Company)

It is used for two quantitative variables that are on same scale.

Objective 1- To identify the relationship between preference and nutrition value,

taste and preservation quality.
Objective 2- To identify the impact of the independent variables i.e. nutrition
value, taste and preservation quality on dependent variable i.e. preference.
Justification- Since all the variables are on interval scale so we will use correlation
analysis for objective 1 and regression analysis for objective 2.
Data analysis-
Correlation-
H0- There is no significant relationship between the variables preference and
nutrition value, taste and preservation quality.
H1- There is significant relationship between the variables preference and
nutrition value, taste and preservation quality.
Correlations

Nutrition Preservation
Preference Value Taste Quality
Preference Pearson Correlation 1 .810(**) .841(**) .888(**)
Sig. (2-tailed) .000 .000 .000
N 40 40 40 40
Nutrition Value Pearson Correlation .810(**) 1 .759(**) .719(**)
Sig. (2-tailed) .000 .000 .000
N 40 40 40 40
Taste Pearson Correlation .841(**) .759(**) 1 .818(**)
Sig. (2-tailed) .000 .000 .000
N 40 40 40 40
Preservation Quality Pearson Correlation .888(**) .719(**) .818(**) 1
Sig. (2-tailed) .000 .000 .000
N 40 40 40 40
** Correlation is significant at the 0.01 level (2-tailed).
Interpretation- From the above table we can see that the correlation between
preference and nutrition value, taste and preservation quality is greater than 0.
So we can say that there is a high degree positive correlation between these pairs
and also p value is 0.00 which is less than α, so all the relationship here are
significant at 5 percent level.
Objective 2 regression analysis-
STEP I-
H0- Model is not significant
H1- Model is significant
ANOVA(b)

Sum of
Model Squares df Mean Square F Sig.
1 Regression 108.375 3 36.125 73.891 .000(a)
Residual 17.600 36 .489
Total 125.975 39
a Predictors: (Constant), Preservation Quality, Nutrition Value, Taste
b Dependent Variable: Preference

Interpretation- Here p=0.00 and α=0.05 that means p<α, so we will reject null
hypothesis and we can say that model is significant.
Step II- Linear regression model
Coefficients (a)

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) .733 .301 2.436 .020
Nutrition Value .295 .103 .284 2.865 .007
Taste .170 .103 .198 1.655 .107
Preservation Quality .548 .118 .522 4.660 .000
a Dependent Variable: Preference

y= 0.733+0.295NV+0.170T+0.548PQ+ E
NV- Nutrition value
T-Taste
PQ-Preservation quality
E-Error

Step III-
Model Summary (b)

Adjusted R Std. Error of

Model R R Square Square the Estimate Durbin-Watson
1 .928(a) .860 .849 .69921 1.466
A. Predictors: (Constant), Preservation Quality, Nutrition Value, Taste
B Dependent Variable: Preference

Interpretation-
Coefficient of determination i.e. r2 is .860 that means the variation in the
dependent variable preference is 86% explained through the independent
variables and the remaining 14% is unexplained

Step IV-
 If nutrition value, taste and preservation quality is equal to 0 then the
value of the preference will be 0.733.
 If we increase nutrition value by 1 unit preference will increase by 29.5%
 If we increase taste by 1 unit then preference will increase by 17%
 If we increase preservation quality by 1 unit then preference will increase
by 54.8%

Step V- With respect to β coefficients.

H0- The β coefficients of all the independent variables are insignificant
H1- The β coefficients of all the independent variables are significant
Interpretation- From the coefficient table we can see that p<α (0.025) for the
variables nutrition value and preservation quality. We reject the null hypothesis
and we can say that the β coefficient for nutrition value and preservation quality
is significant. Higher the value of β coefficient, higher is the importance of that
variable in influencing preference. Here the preservation quality is most
important factor followed by nutrition value therefore it is suggested that
company should work on the preservation quality the most.