Suppose you are working for a consulting company. McDonald’s is one of your clients. Recently MacDonald’s is planing to open a new store at the Eaton Center and wants to know the probability that KFC, its main competitor, will also open a new store there.
McDonald’s provide you a data set (ECO375Essay.dta), collected from a survey on 120 locations in GTA area. It contains the following variables:
y: 1 if KFC operates a store there, 0 if not.
x1: 1 if there is a shopping mall at or near the location x2: 1 if there is a Popeyes Fried Chicken store nearby x3: 1 if there is a metro subway station near the location
x4: Natural logarithm of hourly pedestrian flow at the nearest major intersection (pedestrian flow measured in 10,000 people)
x5: Natural logarithm of the distance to the nearest KFC distribution center (distance measured in 10km)
x6: residence density of the location (measured in 1,000 people per block)
Your assistant also provides you the following information. Eaton Center is a shopping mall and has a subway station inside. No Popeyes Fried Chicken store is identified nearby. On average, there are about 30,000 pedestrians walk through the nearest intersection. The Eaton Center is about 15km away from the nearest KFC distribution center and the population density there is about 4500 people/block.
Based the above information and the data set, provide a report to McDonald’s. In the report, you will explain to McDonald’s what are the key factors that significantly affect the behavior of KFC and how large are those effects. Report your predication of KFC’s decision at the Eaton Center.