The paper "Econometrics Project of LG Electronics " is a perfect example of a micro and macroeconomic case study. LG Electronics is a leading multinational company in home appliances, consumer electronics and mobile communications. The paper focuses on the sale of grills (dependent variable) and the factors affect the quantity demanded of grills (independent variables). The independent variables are price, advertising expenses, gross domestic product, and income level. Through a multivariate regression analysis, the findings indicate that income level, advertising, and GDP positively affect the quantity demanded grills. However, price negatively affects the quantity demanded grills. Company Background LG Electronics is a leading multinational company in home appliances, consumer electronics and mobile communications.
LG has four separate business divisions: Mobile Communications, Home Appliances and Air Solution, Home Entertainment, and Vehicle Components. The company is a global leader in the manufacture of mobile devices, flat-panel televisions, washing machines, grills, air conditioners, and refrigerators. The company’ s global operations are spread over 125 locations and employ over 70000 people. In 2015 the company realised $48.8 billion in total sales revenue. In this paper, the focus will be on the sale of grills (dependent variable) and what factors affect the quantity demanded of grills (independent variables). Variables One dependent variable and four independent variables are used in this study.
Sales are the dependent variable. The independent variables include; price, income, advertising, and gross domestic product. Sales: The number of grills sold in a particular quarter. The units sold is influenced by the independent variables discussed below. Price: The price of grills produced by LG. Price is a major independent variable considered in the model because it influences the demand as well as the supply of the product. Income: This is also a crucial independent variable since it determines the average household spending power.
Therefore, income represents the people’ s purchasing power, which is indispensable in forecasting the sales efficiently.