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A study designed to determine how willing consumers are to pay a premium for non-biotech breakfast cereals (cereals that do not include gene-altered ingredients) included both U.S. and U.K. subjects.6 The response variable was a measure of how much extra they would be willing to pay, and the explanatory variables included items related to perceived risks and bene?ts, demographic variables, and country. Country was coded as 0 for the U.K. subjects and 1 for the U.S. subjects. The parameter estimate for country was reported as -0.2304 with t = -4.196. The total number ofsubjects was 1810.
(a) Interpret the regression coef?cient. Are subjects in the U.S. more willing to pay extra for non-biotech breakfast cereals than U.K. subjects, or are they less willing?
(b) Use the t statistic to ?nd a bound on the P-value. Explain the hypothesis tested by this statistic and summarize the result of the signi?cance test.
(c) The U.S. data were collected using questionnaires that were sent to a nationally representative sample of 5200 households enrolled in the National Dairy Panel (NDP) Group. The response rate was 58%. The same questionnaire was used for an online survey of the 9000 U.K. customers enrolled in another NDP Group. The response rate was 28.5%. Several of the items used in the analysis included "Don't know" as a possible response. Respondents choosing this option were excluded from the analysis. Discuss the implications of these considerations on the results.
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