Correlation Coefficient:

Objective: Computation of Correlation Coefficient using SPSS.

Problem: Compute the Correlation Coefficient from the given data of Advertisement Expenditure
and sales using MS Excel.
Advertisement
Sales
Month Expenditure
(in Rs.'000)
(in Rs.'000)
Jan 10 110
Feb 11 120
Mar 12 115
Apr 13 128
May 11 137
Jun 10 145
Jul 9 150
Aug 10 130
Sept 11 120
Oct 14 115
Steps:
1. From the menu bar, select Analyze/Correlate/Bivariate.

2. The Bivariate Correlations dialog box will appear on the screen.

3. From this dialog box, under Correlation Coefficient, select Pearson.
4. Under Test of Significance, select Two-tailed or (One-tailed) as per the
research requirement.
5. Select Flag Significant Correlations and click OK.
 6. The SPSS output will appear on the screen.

Correlations
Advertisement Sales
Pearson Correlation 1 -.519
Advertisement Sig. (2-tailed) .124
N 10 10
Pearson Correlation -.519 1
Sales Sig. (2-tailed) .124
N 10 10

Regression Analysis:
Objective: Develop a simple linear regression model to predict the impact of
advertisement on sales using SPSS.
Problem: A cable wire company has spent heavily on advertisements. The sales and
advertisement expenses (in Rs.'000) for the 12 randomly selected months is given. Develop a
regression model to predict the impact of advertisement on sales
Advertisemen Sales
t (in Rs.'000) (in Rs.'000)
Month (X) (Y)
Jan 92 930
Feb 94 900
Mar 97 1020
Apr 98 990
May 100 1100
Jun 102 1050
Jul 104 1150
Aug 105 1120
Sep 105 1130
Oct 107 1200
Nov 107 1250
Dec 110 1220

Developing a simple linear regression model using SPSS:

1. Select Analyze from the menu bar. Select Regression from pull-down menu.
2. Another pull-down menu will appear on the screen. Select Linear from this
menu. The Linear Regression dialog box will appear on the screen.

3. Place dependent variable in the Dependent box and independent variable in

the Independent(s) box.
4. From the Regression dialog box, click Statistics, Plots, Options, and Save.
5. The Linear Regression: Statistics dialog box, the Linear Regression: Plots
dialog box, the Linear Regression: Options dialog box, and the Linear
Regression: Save dialog box will appear on the screen. The required output
range can be selected from these dialog boxes.
 6. After selecting required options from each of the four dialog boxes, click OK.
The Linear Regression dialog box will appear on the screen. Click OK.
7. The regression output (partial) produced using SPSS will appear on the
screen.
Output:
Variables Entered/Removeda
Model Variables Variables Method
Entered Removed
1 Advertisementb . Enter
a. Dependent Variable: sales
b. All requested variables entered.

Model Summary
Model R R Square Adjusted R Std. Error of
Square the Estimate
1 .949a .901 .891 37.10688
a. Predictors: (Constant), Advertisement

ANOVAa
Model Sum of df Mean F Sig.
Squares Square
Regression 125197.458 1 125197.458 90.926 .000b
1 Residual 13769.208 10 1376.921
Total 138966.667 11
a. Dependent Variable: sales
b. Predictors: (Constant), Advertisement
Coefficientsa
Unstandardized Standardized t Sig. 95.0% Confidence Interval
Coefficients Coefficients for B
Model
B Std. Error Beta Lower Upper Bound
Bound
(Constant) -852.084 203.776 -4.181 .002 -1306.125 -398.043
1 Advertiseme 19.070 2.000 .949 9.535 .000 14.614 23.527
nt
a. Dependent Variable: sales
The regression model developed using SPSS is: Yc = -852.08+19.07X
Multiple Regression:
Objective: Develop a Multiple linear regression model to predict the impact of
salesmen and advertisement on sales using SPSS.
Problem: A consumer electronics company has adopted an aggressive policy to increase sales of
a newly launched product. The company has invested in advertisements as well as employed
salesmen for increasing sales rapidly. The following table provides sales, the number of employed
salesmen, and advertisement expenditure for 24 randomly selected months. Develop a regression
model to predict the impact of advertisement and the number of salesmen on sales.
Month Sales Salesmen Advertisement
(Rs. in ‘000) (No.) (in Rs. ‘000)
1 5000 25 180
2 5200 35 250
3 5700 15 150
4 6300 27 240
5 6000 20 185
6 6400 11 160
 7 6100 8 177
8 6400 11 315
9 6900 29 170
10 7300 31 240
11 6950 6 184
12 7350 10 218
13 6920 14 216
14 8450 8 246
15 9600 18 229
16 10900 7 269
17 10200 9 244
18 12200 10 305
19 10500 6 303
20 12800 8 320
21 12600 12 322
22 11500 14 460
23 13800 11 430
24 14000 9 422
Developing a multiple linear regression model using SPSS:
1. Select Analyze from the menu bar. Select Regression from pull-down menu.
2. Another pull-down menu will appear on the screen. Select Linear from this
menu. The Linear Regression dialog box will appear on the screen.
3. Place dependent variable in the Dependent box and independent variables in
the Independent(s) box.
4. From the Regression dialog box, click Statistics, Plots, Options, and Save.
5. The Linear Regression: Statistics dialog box, the Linear Regression: Plots
dialog box, the Linear Regression: Options dialog box, and the Linear
Regression: Save dialog box will appear on the screen. The required output
range can be selected from these dialog boxes.
6. After selecting required options from each of the four dialog boxes, click OK.
The Linear Regression dialog box will appear on the screen. Click OK.
7. The regression output (partial) produced using SPSS will appear on the
screen.
Output:
Variables Entered/Removeda
Model Variables Variables Method
Entered Removed
Advertising, . Enter
1 b
Salesmen
 a. Dependent Variable: Sales
b. All requested variables entered.

Model Summaryb
Model R R Square Adjusted R Std. Error of
Square the Estimate
a
1 .860 .739 .714 1560.54652
a. Predictors: (Constant), Advertising, Salesmen
b. Dependent Variable: Sales

ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 144851448.557 2 72425724.279 29.740 .000b
1 Residual 51141413.943 21 2435305.426
Total 195992862.500 23
a. Dependent Variable: Sales
b. Predictors: (Constant), Advertising, Salesmen

Coefficientsa
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
(Constant) 3856.693 1340.772 2.876 .009
1 Salesmen -104.321 39.489 -.306 -2.642 .015
Advertising 24.609 3.923 .726 6.273 .000
a. Dependent Variable: Sales
The multiple regression model developed using SPSS is:
Yc = 3856.69-104.32X1+24.60X2
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