City University of Hong Kong
Department of Management Sciences
MS6221 Predictive Modeling in Marketing
Summer Term 2021
Individual Project
Due on Date: 25th Jul 2021
Total: 50 marks
1 Question
A marketing executive undertook a survey of couples’ preferred dining outlets on the
Valentine’s Day. Thirty couples took part in the survey. Each couple was presented
with two choices of cuisine. Let Y = 0 be the choice of Chinese cuisine and Y = 1
be the choice of non-Chinese cuisine. In addition, the following information on each
couple were collected.
X1 16-70 average age of the couple;
X2 1 if the couple is married,
0 otherwise;
X3 1 if the couple is in a de-facto relationship,
0 otherwise;
X4 0-9 the number of children parented by the couple;
X5 1-45 the number of years the couple has been in the relationship,
rounded to the nearest integer;
X6 1 if at least one partner of the couple is non-Chinese by race,
0 otherwise;
X7 1 if at least one partner of the couple lived overseas for more than ten years,
0 otherwise;
X8 2000-250000 total monthly income of the couple;
X9 1 if at least one partner of the couple is a professional by occupation,
0 otherwise.
The SAS program which includes the data set is
DATA choice;
INPUT y x1-x9;
CARDS;
1 17 0 0 0 1 1 1 2000 0
1 35 1 0 0 8 0 0 40000 1
1 28 0 1 0 5 0 0 35000 1
1 31 1 0 0 4 0 0 65000 1
0 65 1 0 3 42 0 1 2000 1
0 32 0 1 0 3 1 1 80000 1
1 23 0 0 0 2 0 0 10000 0
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MS6221 TST21S Individual Project
1 45 1 0 0 25 0 1 120000 1
1 38 1 0 2 19 0 0 90000 1
0 55 0 1 0 2 0 0 200000 0
1 20 0 0 0 2 0 0 22000 0
0 70 1 0 2 45 0 0 20000 0
1 40 1 0 1 13 0 0 75000 1
0 40 1 0 1 10 1 1 80000 1
0 37 0 1 0 3 1 1 120000 1
0 38 0 1 0 2 1 1 250000 1
1 30 1 0 9 7 0 0 60000 0
0 33 0 0 0 3 1 1 100000 1
1 22 0 0 0 4 0 0 30000 0
1 27 1 0 0 5 0 0 70000 1
0 36 0 1 1 7 1 1 150000 0
1 18 0 0 0 1 0 0 3000 0
0 35 1 0 3 8 1 1 190000 1
0 39 1 0 2 7 1 1 170000 1
0 38 1 0 1 8 1 1 150000 1
0 38 1 0 2 8 1 1 150000 1
1 19 0 0 0 1 0 0 10000 0
1 16 0 0 0 1 0 0 2000 0
0 44 1 0 1 16 0 1 90000 0
1 34 1 0 1 13 0 0 70000 0
;
2 Requirements
A report consisting of an introduction, data analysis and findings. The report is
limited to two pages on 12-point font, 1.5-line spacing and 1-inch margin. An
appendix which contains SAS code, SAS output and references is expected. The
appendix may also contain supplementary materials such as tables and figures which
help explain the report. There is no page limit for the appendix.
The introduction should briefly explains the motivations and include references
related to the project question. For example, in Lee et al. (2012, IME, 538-550),
“The Danish fire claim data consists of 2167 observations on fire loss claims in
millions of Danish Kroner at 1985 prices between 1980 and 1990. There have been
extensive studies on this data set, for example as in Embrechts et al. (1997) and
McNeil (1997). It was studied in Wong and Li (2010) to illustrate model fitting for
the threshold model (1).” Each of the citations has to be included in the references.
Data analysis should include but not limited to model selection, parameter sig-
nificance and model significance. It is not essential to mention each step in the
model selection. For example, the statement ‘Stepwise selection by eliminating one
variance in each step leads to the model’ is preferred to ‘X7 is first dropped because
the p-value corresponding to β7 is the highest, followed by X6...’.
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MS6221 TST21S Individual Project
The findings are different from data analysis in the way that clear messages from
the resulting model are delivered. For instance, the predicted odds of opting for non-
Chinese cuisine for a coupon decreases by 18% for the age increases by one year,
holding the marital status and number of children fixed. A suggestion or implication
is desirable. For example, if a dining outlet has a target group of young people aged
between 18 and 30, non-Chinese cuisine is likely, with probability 0.7 (see Appendix
for the calculation), to boost sales.
3 Marking and Grading
The lecturer and the tutor will independently review the individual reports on the
following criteria each with a weight
• Appropriate and correct statistical analysis, 50%
• Use of English, 20%
• Clear presentation of results, 30%
It is important to have a coherent analysis of the data, guided by statistical reason-
ing. Weak reasons or contradictory results are occasional. Selective presentation is
sometimes needed. It is also important to write simple sentences with suitable use
of words. Check on grammar and sentence structure is essential. Bonus point will
be given to appropriate analysis using techniques introduced in the course.
4 Important Dates
• 11st Jul 2021: Submission of draft (optional: no penalty for no submission
and no bonus for submission)
• 25th Jul 2021: Submission of individual project
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