Enter Method

Model Summary

Step -2 Log likelihood Cox & Snell R Nagelkerke R

Square Square

1 182.328a .498 .807

a. Estimation terminated at iteration number 9 because

parameter estimates changed by less than .001.

Forward Method

Model Summary

Step -2 Log likelihood Cox & Snell R Nagelkerke R

Square Square

1 249.324a .445 .722

2 232.661a .459 .744
3 218.226a .470 .762
4 205.723a .480 .778
5 201.607a .483 .783

a. Estimation terminated at iteration number 8 because

parameter estimates changed by less than .001.

Ward Method
Model Summary

Step -2 Log likelihood Cox & Snell R Nagelkerke R

Square Square

1 249.324a .445 .722

2 232.661a .459 .744
3 218.226a .470 .762
4 205.723a .480 .778
5 201.607a .483 .783

a. Estimation terminated at iteration number 8 because

parameter estimates changed by less than .001.

Regression after removing the two irrelevant variables i.e Professional and Unemployed
 Model Summary

Step -2 Log likelihood Cox & Snell R Nagelkerke R

Square Square

1 249.324a .445 .722

2 232.661a .459 .744
3 218.226a .470 .762
4 205.723a .480 .778
5 201.607a .483 .783

a. Estimation terminated at iteration number 8 because

parameter estimates changed by less than .001.

Variables in the Equation

B S.E. Wald df Sig. Exp(B)

Income .000 .000 125.069 1 .000 1.000

Step 1a
Constant -9.344 .832 126.280 1 .000 .000
Income .000 .000 109.773 1 .000 1.000
Step 2b Is_Married 1.399 .358 15.263 1 .000 4.052
Constant -10.505 1.005 109.370 1 .000 .000
Income .000 .000 101.411 1 .000 1.000
Is_Female 1.365 .379 12.979 1 .000 3.917
Step 3c
Is_Married 1.380 .373 13.665 1 .000 3.976
Constant -12.033 1.217 97.837 1 .000 .000
Income .000 .000 93.890 1 .000 1.000
Is_Female 1.442 .397 13.170 1 .000 4.228
Step 4d Is_Married 1.413 .385 13.491 1 .000 4.107
White 1.622 .480 11.407 1 .001 5.063
Constant -13.876 1.470 89.072 1 .000 .000
Income .000 .000 91.515 1 .000 1.000

Is_Female 1.460 .407 12.878 1 .000 4.306

Is_Married 1.418 .389 13.314 1 .000 4.129

Step 5e
White 1.654 .485 11.655 1 .001 5.228

Prev_Child_Mag 1.330 .676 3.864 1 .049 3.780

Constant -14.034 1.498 87.789 1 .000 .000

 a. Variable(s) entered on step 1: Income.
b. Variable(s) entered on step 2: Is_Married.
c. Variable(s) entered on step 3: Is_Female.
d. Variable(s) entered on step 4: White.
e. Variable(s) entered on step 5: Prev_Child_Mag.

Answer 1a:
By running the binary regression we got the residuals and then we run the regression between
the residual and the predicted value. The results are as follows:
Residuals Statisticsa

Minimum Maximum Mean Std. Deviation N

Predicted Value .0000000 .0000000 .0000000 .00000000 673
Residual -.939207 .95499605 .00000000 .20749288 673
Std. Predicted Value .000 .000 .000 .000 673
Std. Residual -4.472 4.547 .000 .988 673
a. Dependent Variable: Difference between obs erved and predicted probabilities
Thisthehistogramplotwegot,ittellsusthenormalitywehaveintheresidualvalues.

Histogram

Dependent Variable: Difference between observed and predicted probabilities

500

400
Frequency

300

200

100

Mean = 6.18E-17
Std. Dev. = 0.988
0 N = 673
-6 -4 -2 0 2 4 6

Regression Standardized Residual

Thescatterplotwegotisasfolows.
 Scatterplot

Dependent Variable: Difference between observed and predicted probabilities

Regression Standardized Residual

-2

-4

-1.0 -0.5 0.0 0.5 1.0

Regression Standardized Predicted Value

Answer 2
Income .000 .000 91.515 1 .000 1.000

Is_Female 1.460 .407 12.878 1 .000 4.306

Is_Married 1.418 .389 13.314 1 .000 4.129

Step 5e
White 1.654 .485 11.655 1 .001 5.228

Prev_Child_Mag 1.330 .676 3.864 1 .049 3.780

Constant -14.034 1.498 87.789 1 .000 .000

Final Equation:

P=-14.034+.000*28550+1.460*1+1.418*1+1.654*1+1.330*0=-9.5034

=e-9.5034/ (1+ e-9.5034)= 0.0000745922 or 0

Interpretation: The probability of buying this product is zero as the probability for buying is zero.
Hence she will not buy the mentioned products.

Answer 3:
Regression

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.697906
R Square 0.487073
Adjusted R Square
0.483228
Standard Error
0.279771
Observations 673

ANOVA
df SS MS F Significance F
Regression 5 49.5758 9.91516 126.6761 3.16E-94
Residual 667 52.20726 0.078272
Total 672 101.7831

Coefficients
Standard Error
t Stat P-value Lower 95%Upper 95%Lower 95.0%Upper 95.0%
Intercept -0.28341 0.026077 -10.8679 1.92E-25 -0.33461 -0.2322 -0.33461 -0.232203139
Income 1.04E-05 5.17E-07 20.03789 2.81E-70 9.34E-06 1.14E-05 9.34E-06 1.14E-05
Is Female 0.073829 0.021944 3.364463 0.000811 0.030742 0.116916 0.030742 0.116915834
Is Married 0.055161 0.025214 2.187681 0.029039 0.005652 0.10467 0.005652 0.104669673
White 0.053252 0.024 2.218809 0.026836 0.006127 0.100378 0.006127 0.100377569
Prev Child Mag
0.124987 0.042175 2.963512 0.00315 0.042175 0.2078 0.042175 0.207799858

Taking buy as an independent variable and income, female, married, white and previous child as
dependent variables we have run a regression we got the above values. Then we extracted the
score.

Score= -0.28341+Income*C2+isfemale*D2+ismarried*E2+white*F2+Previouschild*G2

Similarly for all other inputs we will do the same.

After that we extracted probability.

P= escore/(1+ escore )

Than we extracted likelihood

Likelihood= If(buy=1,P,1-P)

Than we extracted Ln Likelihood.

Than we extracted the sum of Ln likelihood.

Than we run the solver and maximised sum of Ln likelihood and got the following Results.

Intercept Income Is Female Is Married White Prev Child Mag product

0 1.04E-05 0.073829 0.055161 0.053252 0.124987 2.28E-235 -540.282