Sandbox PwC Distribution Project Case Study Business Report
- Subject Code :
COMM5000
Descriptionofassessmenttask
Inthisfinalreport,youwillusetheinformationyouhavecollectedinyouranalysisinM1andM2tobuildalinearregressionmodel.ThismodelwillcapturethekeyobjectiveswehavebeenpursuingsinceM1.
- We Wanttoinvestigatewhatcompanycharacteristicsaredeterminantfactorsofits
- We Wanttoknowifthecountryofjurisdictionhasapremiumoreffectonacompany's
- We want toaddressthequestionofwhetherCovid19hasaffected theprofitabilityofwholesale
In M2, you have performed a series of hypothesis testing to see whether there is evidence that profits differ betweencountries (at least for some industries) and whether there was a significant change from 2019 to post Covid19 years.Hypothesis testing is very informative but does not provide us with a means to control for confounding effects. Forexample, suppose you conclude that you reject a null of equal population means of operating revenues growth ratesbetween the UK and Australia. In that case, you cant conclude that this difference is due solely to the country's effect.Other factors may affect revenues even if you control for the country of jurisdiction.Meaning that rejecting the nullhypothesishereisdrivenbyfactorsotherthandifferencesinthecountry.
To provide a ceteris paribus analysis, we need to use a regression model to identify and estimate the country effect (ifany) while controlling for other factors. Other factors are defined by the data we are given. We will use the informationonthecompanycharacteristicstocontrolforthefactorsthatmaydriveprofitabilityandestimatetheeffectofthecountryofjurisdiction.
