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Business Studies Exam: ST3188 Paper 2

This document contains an examination paper for a statistical methods course. It includes instructions for candidates on the paper format and grading. Section A contains one compulsory question assessing different sampling methods for market research. Section B contains three questions, and candidates must answer two. The questions cover topics such as factor analysis, multiple regression, analysis of variance, and market research techniques. The paper tests students' abilities to apply statistical concepts and interpret statistical output to evaluate research studies and proposals.

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0% found this document useful (0 votes)
38 views10 pages

Business Studies Exam: ST3188 Paper 2

This document contains an examination paper for a statistical methods course. It includes instructions for candidates on the paper format and grading. Section A contains one compulsory question assessing different sampling methods for market research. Section B contains three questions, and candidates must answer two. The questions cover topics such as factor analysis, multiple regression, analysis of variance, and market research techniques. The paper tests students' abilities to apply statistical concepts and interpret statistical output to evaluate research studies and proposals.

Uploaded by

dupsimugne
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Specimen examination paper

ST3188
Statistical methods for market research

Instructions to candidates

This paper contains two sections. Section A is compulsory and contains one question.
Section B contains three questions.

Answer THE question in Section A and TWO questions from Section B.

Section A carries 40 marks and Section B carries 60 marks. All questions in Section B will be
given equal weight (30 marks).

The coursework mark (worth 30% of the final mark) will be combined with the examination mark
(worth 70%) to give the overall percentage for the module.

A calculator may be used when answering questions on this paper and it must comply in all
respects with the specification given with your Admission Notice. The make and type of
machine must be clearly stated on the front cover of the answer book.

c University of London / ST3188 Page 1 of 10


SECTION A: Compulsory

1. (a) Transport for London is the local government body responsible for most aspects of
the transport system in London. Its role is to implement the transport strategy and
to manage transport services across London.
TfL launched the Night Tube service on the London Underground in August 2016.
Currently, the Night Tube operates on Friday and Saturday nights across five lines
(the Central, Jubilee, Northern, Piccadilly and Victoria lines). TfL management
would consider expansion of the service to more lines and/or other nights of the
week, subject to consumer demand.
Some 1.34 billion passenger journeys are made each year on London Underground
(albeit with many individuals making multiple journeys), however there is no
sampling frame with full coverage of all distinct passengers available. Despite this
limitation, TfL management wants to conduct market research to assess consumer
appetite for an extension to the Night Tube service, which may have fare
implications. At present Night Tube fares are classified as off-peak, although a special
night-off-peak fare could be introduced, depending on passengers’ price elasticities.
TfL has invited you to devise an appropriate sampling scheme to research attitudes
towards developing the Night Tube. Explain in detail how each of the following
sampling methods could be applied to the overall sampling strategy. Make sure you
describe the merits and limitations of each as well as how each would be applied in
practice.
i. Convenience sampling.
ii. Simple random sampling.
iii. Systematic sampling.
iv. Stratified sampling.
(20 marks)

(b) Suppose we are interested in estimating the mean of a population with a finite variance
using a simple random sample of size n.
i. State a suitable estimator of the population mean as well as its sampling
distribution. Mention any assumptions which you make.
ii. Explain how the sampling distribution derived in i. should be interpreted.
iii. Explain how to determine the minimum sample size necessary to estimate a
population mean to within e units assuming the population standard deviation
is known. If the population standard deviation was unknown, how would you
deal with this?
iv. Explain the purpose of the finite population correction factor (including a
formula) and when it should be used.
(20 marks)

c University of London / ST3188 Page 2 of 10


SECTION B: Answer two questions. Each question carries equal weight.

2. (a) A national newspaper was interested in researching how effective paid-for advertising
was in its newspapers. The editors suspected the number of customer enquiries
resulting from advertisements depended on two key factors – the day of the week
(Monday through Friday), and the section of the newspaper where the advertisement
appeared (news, business and sports).
Analyse the selected SPSS output in Figure 1 (spread over the next two pages) and
discuss what conclusions can be drawn from the data. In your analysis, be sure to
address at least the following:
• Describe the strength of the joint effect of the factors.
• Test the significance of the variables individually and the interaction between
them and interpret the results.
• How you would use the results to inform your pricing strategy for
paid-for advertisements in this national newspaper.
(20 marks)
(b) i. What are projective techniques? Under what circumstances should projective
techniques be used?
ii. Describe the word association technique. Give an example of a situation in which
this technique is especially useful.
iii. Describe the story completion technique. Give an example of the type of
respondent and the context in which such a technique would work.
(10 marks)

c University of London / ST3188 Page 3 of 10


Figure 1

c University of London / ST3188 Page 4 of 10


Figure 1 (continued)

c University of London / ST3188 Page 5 of 10


3. (a) Many factors determine the attendance at team sporting events, such as when the
game is played, the weather, the opponent, and whether the team is having a good
season. In an effort to increase ticket sales at matches, some football clubs decided to
run promotions such as free concerts after a game, or giveaways of team merchandise
etc. A multiple regression was run on the following variables for a football club:
• Paid attendance for each home game, Attendance.
• Highest temperature on the fixture day, Temp.
• Team’s winning percentage at the time of the game, Win.
• Opponent team’s winning percentage at the time of the game, OpWin.
• A dummy variable of 1 if the game is played on Friday, Saturday or Sunday, and
0 otherwise, Weekend.
• A dummy variable of 1 if a promotion was held, and 0 otherwise, Promotion.
Selected SPSS output is provided in Figure 2. Analyse the regression results, making
sure you first write out the full regression model, including any assumptions, and
the estimated model. In light of the regression results, propose any changes you
would make to the model, including any other explanatory variables which you would
consider using, or any you would remove from the existing model. Keep in mind the
objective of increasing ticket sales at matches.
(20 marks)
(b) Define a ‘response rate’ and non-response. What strategies are available for
minimising non-response and adjusting for it? In your response, consider how these
are tackled across different data collection methods.
(10 marks)

c University of London / ST3188 Page 6 of 10


Figure 2

c University of London / ST3188 Page 7 of 10


4. (a) The dietary characteristics of 200 respondents were recorded in a survey. Respondents
were asked to rate the extent to which their diet agreed with the following descriptors:
• fast food
• filling
• hearty
• low meat
• vegetarian.
Figure 3 (spread over the next two pages) presents selected SPSS output from a factor
analysis with principal components extraction, using the varimax rotation procedure.
Interpret the output. In your analysis, be sure to address at least the following:
• Explain how you determine the number of factors and interpret the extracted
factors.
• Explain qualitatively and quantitatively how the fit of the factor analysis model
should be examined.
• Briefly discuss for what modelling purpose(s) extracted factors could be used.
(20 marks)
(b) Consider a one-way analysis of variance where the independent categorical variable,
X, has c levels, and nj is the sample size for category j for j = 1, . . . , c. Explain how
the total variation in the dependent variable, Y , is decomposed. You should support
your answer with formulae and define any terms used.
(10 marks)

c University of London / ST3188 Page 8 of 10


Figure 3

c University of London / ST3188 Page 9 of 10


Figure 3 (continued)

[END OF PAPER]

c University of London / ST3188 Page 10 of 10

Common questions

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Including a dummy variable for 'weekend' in a regression model predicting sports event attendance captures potential differences in attendance patterns between weekdays and weekends. This variable provides coefficient estimates indicating the average change in attendance for weekend games compared to weekdays, controlling for other variables . If significant, the 'weekend' variable confirms distinct attendance trends, allowing targeted marketing and operational strategies to maximize turnout. Additionally, its inclusion improves model specificity, potentially leading to more accurate attendance forecasts .

Selecting an appropriate sampling technique involves considering both the merits and limitations of different methods. Convenience sampling, while easy to implement, may introduce bias as it involves selecting respondents that are easiest to access, possibly leading to a non-representative sample . Simple random sampling is more robust, providing each member of the population an equal chance of being selected, which minimizes bias but can be logistically challenging without a comprehensive sampling frame . Systematic sampling might offer a compromise by selecting every nth passenger, though it assumes a linear arrangement and risks periodicity bias . Stratified sampling could offer the most precision by dividing the population into subgroups (strata) based on relevant characteristics (e.g., age, travel frequency) and ensuring each stratum is proportionally represented, reducing variance in the resulting estimates .

The effectiveness of paid-for advertising in newspapers can be evaluated by analyzing SPSS output to understand the joint and individual effects of key factors, such as the day of the week and section of the newspaper where advertisements appear. Testing the significance of these factors and their interaction, using ANOVA or regression analysis, reveals whether variations in advertisements' placement affect customer enquiries . Significant results can guide decisions on pricing strategies; for instance, higher rates could be set for days or sections with stronger associations to increased customer enquiries .

Projective techniques are particularly beneficial in situations where direct questions might not elicit truthful or insightful responses, often due to the sensitive or subconscious nature of the subject. They enable respondents to project their thoughts and feelings onto an external stimulus, such as images or stories, thereby revealing deeper insights . Unlike direct questioning, which might lead to socially desirable responses, projective methods like word association and story completion bypass these barriers by indirectly exploring consumer attitudes and motivations .

Determining the number of factors in factor analysis involves criteria such as the eigenvalue-greater-than-one rule, scree plot inspection, and cumulative variance explained. These ensure the retention of factors that sufficiently account for the data's variability . Extracted factors serve various applications, including reducing dimensionality for more straightforward data interpretation and creating factor scores for use in further analyses like regression. They also aid in identifying underlying constructs, enhancing the understanding of the data structure and relationships between observed variables .

The finite population correction factor adjusts the standard error of the mean when sampling from a finite population without replacement. It is used when the sample size is a significant fraction (usually over 5%) of the total population. The correction factor is calculated as \(\sqrt{(N-n)/(N-1)}\), where N is the population size and n is the sample size . Incorporating this factor reduces the estimated standard error, consequently requiring a smaller sample size to achieve a given level of precision .

To minimize non-response bias, strategies such as follow-up reminders, incentives for participation, and simplifying survey questions can be effective across various data collection methods. In face-to-face interviews, building rapport with respondents can increase cooperation, whereas for online surveys, improving accessibility and mobile compatibility can boost response rates . Additionally, statistical adjustments like weighting and imputation are used to correct for non-response in the analysis phase, ensuring that findings remain representative of the intended population .

A regression model predicting football match attendance includes variables like promotion and weather to capture factors affecting audience turnout. Promotion activities (e.g., giveaways) could incentivize attendance, captured as a dummy variable, while weather may deter or encourage spectators, represented by quantitative temperature data . The model should be assessed through diagnostics, like examining residual plots for patterns indicating specification errors, or high VIFs suggesting multicollinearity . Adjustments might involve exploring additional predictors like players' popularity, removing insignificant variables, or applying interaction terms to account for combined effects of existing predictors .

The sampling distribution of a sample mean refers to the probability distribution of the mean values of random samples of a given size from a population. Assuming the sample is drawn from a normal distribution or n is large (Central Limit Theorem), the sampling distribution will approximate a normal distribution, centered at the true population mean with a standard deviation equal to the population standard deviation divided by the square root of the sample size . It provides the framework to make inferences about the population mean, such as constructing confidence intervals and hypothesis testing .

In a one-way ANOVA, the total variation in a dependent variable is decomposed into variation explained by the independent variable's categories (between-group variation) and unexplained variation (within-group variation). Mathematically, the total sum of squares (SST) is the sum of the between-group sum of squares (SSB) and the within-group sum of squares (SSW). This decomposition allows for testing the null hypothesis that all group means are equal, where significant results imply that at least one group mean differs, indicating that the independent variable significantly affects the dependent variable .

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