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Interpreting Log, Dummy and Interaction Coefficients
You fit the following model to 40,000 e-commerce sessions, where
revenue is session revenue in dollars, pages is pages viewed,
mobile is 1 for mobile and 0 for desktop, and returning is 1 for a
returning customer:
log(revenue) = 2.10 + 0.08·pages − 0.35·mobile + 0.50·returning + 0.12·(mobile × returning)
- Interpret the coefficient on
pagesas a percentage effect. Is the "multiply by 100" shortcut acceptable here? - What is the estimated percentage difference in revenue between a mobile and a desktop session (a) for new customers and (b) for returning customers, holding pages fixed?
- A colleague reads the output and says "mobile reduces revenue by 35%, and returning customers spend 50% more." Give two distinct reasons that statement is wrong or incomplete.
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