Demand Analysis

Introduction & Meaning: Demand in common parlance means the desire for an object. But in economics demand is
something more than this.

According to Stonier and Hague, “Demand in economics means demand backed up by enough money to pay for the goods
demanded”. This means that the demand becomes effective only it if is backed by the purchasing power in addition to this
there must be willingness to buy a commodity.

Thus demand in economics means the desire backed by the willingness to buy a commodity and the purchasing power to pay.

In the words of “Benham” “The demand for anything at a given price is the amount of it which will be bought per unit of time
at that Price”. (Thus demand is always at a price for a definite quantity at a specified time.)

Thus demand has three essentials – price, quantity demanded and time. Without these, demand has to significance in
economics.
Therefore a product is said to possess demand from a customer/consumer point of view , if it fulfils all of the
following three conditions:

⮚ Desire to buy the product

⮚ Enough purchasing power to buy the product
⮚ Willingness to buy the product at that particular price
Factors Affecting Demand:
There are factors on which the demand for a commodity depends. These factors are economic, social as well as political
factors. The effect of all the factors on the amount demanded for the commodity is called Demand Function. These
factors are as follows:

1. Price of the Commodity: The most important factor-affecting amount demanded is the price of the commodity. The
amount of a commodity demanded at a particular price is more properly called price demand. The relation between
price and demand is called the Law of Demand. It is not only the existing price but also the expected changes in
price, which affect demand.
2. Income of the Consumer: The second most important factor influencing demand is consumer income. In fact, we can
establish a relation between the consumer income and the demand at different levels of income, price and other
things remaining the same. The demand for a normal commodity goes up when income rises and falls down when
income falls.
3. Prices of related goods: The demand for a commodity is also affected by the changes in prices of the related goods also.
Related goods can be of two types:
(i). Substitutes which can replace each other in use; for example, tea and coffee are substitutes. The change in price of a
substitute has effect on a commodity’s demand in the same direction in which price changes. The rise in price of coffee shall
raise the demand for tea

(ii). Complementary foods are those which are jointly demanded, such as pen and ink. In such cases complementary goods
have opposite relationship between price of one commodity and the amount demanded for the other. If the price of pens
goes up, their demand is less as a result of which the demand for ink is also less. The price and demand go in opposite
direction. The effect of changes in price of a commodity on amounts demanded of related commodities is called Cross
Demand.

4. Tastes of the Consumers: The amount demanded also depends on consumers’ taste. Tastes include fashion, habit, customs,
etc. A consumer’s taste is also affected by advertisement. If the taste for a commodity goes up, its amount demanded is more
even at the same price. This is called increase in demand. The opposite is called decrease in demand
5. Population: Increase in population increases demand for necessaries of life. The composition of population also affects
demand. Composition of population means the proportion of young and old and children as well as the ratio of men to
women. A change in composition of population has an effect on the nature of demand for different commodities.
6. Government Policy: Government policy affects the demands for commodities through taxation. Taxing a commodity
increases its price and the demand goes down. Similarly, financial help from the government increases the demand for a
commodity while lowering its price.

7. Expectations regarding the future: If consumers expect changes in price of commodity in future, they will change the
demand at present even when the present price remains the same. Similarly, if consumers expect their incomes to rise in
the near future they may increase the demand for a commodity just now.
8. Climate and weather: The climate of an area and the weather prevailing there has a decisive effect on consumer‟s
demand. In cold areas woolen cloth is demanded. During hot summer days, ice is very much in demand. On a rainy day,
ice cream is not so much demanded.

9. State of business: The level of demand for different commodities also depends upon the business conditions in the
country. If the country is passing through boom conditions, there will be a marked increase in demand. On the other hand,
the level of demand goes down during depression
Law of Demand Law of demand shows the relation between price and quantity demanded of a commodity in the market.

In the words of Marshall, “the amount demand increases with a fall in price and diminishes with a rise in price”. A rise in the
price of a commodity is followed by a reduction in demand and a fall in price is followed by an increase in demand, if a
condition of demand remains constant.

The law of demand may be explained with the help of the following demand schedule.

Demand Schedule
Price of Good Quantity Demanded
(Rs)
10 1
8 2
6 3
4 4
2 5
Law of demand is based When the price falls from Rs. 10 to 8 quantity demand increases from 1 to 2. In the same way as
price falls, quantity demand increases on the basis of the demand schedule we can draw the demand curve.
The demand curve DD shows the inverse relation between price and quantity demand of apple. It is downward sloping.

Assumptions:
1. This is no change in consumers taste and preferences.
2. Income should remain constant.
3. Prices of other goods should not change.
4. There should be no substitute for the commodity
5. The commodity should not confer at any distinction.
6. The demand for the commodity should be continuous
7. People should not expect any change in the price of the commodity
Exceptional Demand Curve (Exceptions to Law of Demand):
Sometimes the demand curve slopes upwards from left to right. In this case the demand curve has a positive slope.

When price increases from OP to Op1 quantity demanded also increases from to OQ1 and vice versa. The reasons for
exceptional demand curve are as follows.
1. Giffen paradox: The Giffen good or inferior good is an exception to the law of demand. When the price of an inferior
good falls, the poor will buy less and vice versa. For example, when the price of maize falls, the poor are willing to
spend more on superior goods than on maize.Thus a fall in price is followed by reduction in quantity demanded .
“Giffen” first explained this and therefore it is called as Giffen‟s paradox.

2. Veblen or Demonstration effect: “Veblen” has explained the exceptional demand curve through his doctrine of
conspicuous consumption. Rich people buy certain good because it gives social distinction or prestige for example
diamonds are bought by the richer class for the prestige it possess. It the price of diamonds falls poor also will buy is
hence they will not give prestige. Therefore, rich people may stop buying this commodity.

3. Ignorance: Sometimes, the quality of the commodity is Judge by its price. Consumers think that the product is superior
if the price is high. As such they buy more at a higher price.

4. Speculative effect: If the price of the commodity is increasing the consumers will buy more of it because of the fear
that it increase still further, Thus, an increase in price may not be accomplished by a decrease in demand.

5. Fear of shortage: During the times of emergency of war People may expect shortage of a commodity. At that time,
they may buy more at a higher price to keep stocks for the future.

6. Necessaries: In the case of necessaries like rice, vegetables etc. people buy more even at a higher price.
Elasticity of Demand
Elasticity of demand explains the relationship between a change in price and consequent change in amount
demanded. “Marshall” introduced the concept of elasticity of demand.

Elasticity of demand shows the extent of change in quantity demanded to a change in price.

In the words of “Marshall”, “The elasticity of demand in a market is great or small according as the amount demanded
increases much or little for a given fall in the price and diminishes much or little for a given rise in Price”

Elastic demand: A small change in price may lead to a great change in quantity demanded. In this case, demand is
elastic.

In-elastic demand: If a big change in price is followed by a small change in demanded then the demand in “inelastic”.
Types of Elasticity of Demand

1. Price Elasticity of Demand: Marshall was the first economist to define price elasticity of demand. Price elasticity of
demand measures changes in quantity demand to a change in Price. It is the ratio of percentage change in quantity
demanded to a percentage change in price.
2. Income Elasticity of Demand:

Income elasticity of demand shows the change in quantity demanded as a result of a change in income. Income
elasticity of demand may be slated in the form of a formula.
b. In case of compliments, cross elasticity is negative. If increase in the price of one commodity leads to a decrease in
the quantity demanded of another and vice versa. When price of car goes up from OP to OP, the quantity demanded of
petrol decreases from OQ to OQ!. The cross-demanded curve has negative slope.
Price Elasticity of Demand – Types

A. Perfectly elastic demand

B. Perfectly Inelastic Demand
C. Relatively elastic demand
D. Relatively in-elastic demand
E. Unit elasticity of demand
Income Elasticity of Demand – Types

A. Zero Income Elasticity

B. Negative Income Elasticity
C. Unit Income Elasticity
D. Income Elasticity greater than Unity
E. Income Elasticity less than Unity
Simple Numerical Problems :

Yesterday, the price of envelopes was Rs.3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to
Rs. 3.75 a box, and Julie is now willing to buy 8 boxes. Is Julie's demand for envelopes elastic or inelastic? What is Julie's
elasticity of demand?
To find Julie's elasticity of demand, we need to divide the percent change in quantity by the percent change in price.

% Change in Quantity = (8 - 10)/(10) = -0.20 = -20%

% Change in Price = (3.75 - 3.00)/(3.00) = 0.25 = 25%
Elasticity = |(-20%)/(25%)| = |-0.8| = 0.8

Her elasticity of demand is the absolute value of -0.8, or 0.8. Julie's elasticity of demand is inelastic, since it is less than 1.
If Neil's elasticity of demand for hot dogs is constantly 0.9, and he buys 4 hot dogs when the price is Rs.1.50 per hot dog,
how many will he buy when the price is Rs.1.00 per hot dog?

This time, we are using elasticity to find quantity, instead of the other way around. We will use the same formula, plug in
what we know, and solve from there.

Elasticity =
And, in the case of John, %Change in Quantity = (X – 4)/4
Therefore :
Elasticity = 0.9 = |((X – 4)/4)/(% Change in Price)|
% Change in Price = (1.00 - 1.50)/(1.50) = -33%
0.9 = |(X – 4)/4)/(-33%)|
|((X - 4)/4)| = 0.3
0.3 = (X - 4)/4
X = 5.2

Since Neil probably can't buy fractions of hot dogs, it looks like he will buy 5 hot dogs when the price drops to Rs.1.00 per
hot dog.
If the cross elasticity of demand between peanut butter and milk is -1.11, then are peanut butter and
milk substitutes or complements? Be able to explain your answer.

A cinema charges £8 per ticket for evening screenings and sells 250 tickets a night on average. They estimate
that the price elasticity of demand for tickets is (-) 1.6.
Calculate the expected number of tickets sold if they reduce the ticket price to £7.

A local council raises the price of car parking from £3 per day to £5 per day and finds that usage of car parks
contracts from 1,200 cars a day to 900 cars per day.
Calculate the price elasticity of demand for this price change and calculate whether total revenue from the car
park rises or falls.
Answer:
% change in price = (+) 66.7%
% change in demand = (-) 25%
PED = -25/66.7
= 0.375 (i.e. demand is price inelastic)
Total revenue:
@£3 per day – revenue = £3 x 1,200 = £3,600
@ £5 per day – revenue = £5 x 900 = £4,500
Revenue rises when Ped <1 and a business raises their average selling price.
Kevin has just received a large promotion and his income has risen from $200 to $400
per week. As a result, his demand for good A has fallen from 10 units per week to 3
units per week.
a) Calculate Kevin's income elasticity of demand for good A.
b) Is good A a normal or inferior good for Kevin? Explain.
a) The income elasticity is the percentage change in consumption of good A
divided by the percentage change in income. The percentage change in
consumption = (3 - 10) / 10 = -70%. The percentage change in income = (400 -
200) / 200 = 100%. Income elasticity of demand is:
•-70% / 100% = -0.7
b) Since income elasticity of demand is negative, good A is an inferior good.
A Business firm estimate that when the average real income of its customers falls from $60,000 to $40,000, the demand for
its widgets falls from 5,000 to 4,000 units sold, with all other things remaining the same. Calculate the income elasticity of
demand for the widgets and answer what type of income elasticity it is.
Using the income elasticity of demand formula,
YED = (New Quantity Demand – Old Quantity Demand)/(Old Quantity Demand) / (New
Income – Old Income)/(Old Income)
= (4,000 – 5,000)/(5,000) / (40,000-60,000)/(60,000)
= ~0.67
This produces an elasticity of 0.67, which indicates customers are not particularly sensitive
to changes in their income when it comes to buying these widgets. The demand does not fall
significantly with a fall in income.
Example 1: cross elasticity
The quantity demanded of product A has increased by 12% in response to a 15% increase in price of
product B. Calculate the cross elasticity of demand and tell whether the product pair is (a) apples and
oranges, or (b) cars and gas.
Cross elasticity of demand
= % change in quantity demanded of A ÷ % change in price of B
= 12% ÷ 15%
= 0.67
Since the cross elasticity of demand is positive, product A and B are substitute goods. They are apples
and oranges.
Example 2: cross elasticity and complements

The government of Selgina is serious about drugs. Possession of drugs is illegal and is severely penalized. However,
a black market exists which the government has failed to dismantle despite serious attempts. Khusenichho Chamling,
the health minister, is worried about the situation. In early 2019, a consultant working with health ministry suggested
that the government should increase the price of a pack of cigarettes from 200 Selgina dollars (S$) to S$600. A
survey conducted in December 2019 suggested that over the year, the quantity demanded of marijuana decreased
from 2,000 kgs per day to just 800 kgs. Calculate the cross elasticity of demand and tell why the policy has proved so
effective.
Percentage increase in price of cigarettes
= (600 − 200) ÷ [(600+200) ÷ 2]
= 100%
Percentage increase in quantity demanded of marijuana
= (800 − 2,000) ÷ [(800+2000) ÷ 2]
= -85.71%
Cross elasticity of demand
= % change in quantity demanded ÷ % change in price
= -85.71% ÷ 100%
= -0.86
Cigarettes and marijuana have negative cross elasticity of demand which tells that they are complimentary
goods.
The policy has proved effective because cigarettes and marijuana are consumed together. Increase in price of
cigarettes increased the price of the whole bundle and reduced the purchasing power of people and resulted in
a decrease in consumption of marijuana.
Supply is a schedule showing the relationship between what producers are willing to produce at each price during a
specific period. Because producers must pay expenses to produce a product and because they expect to earn a profit,
producers will increase the supply in proportion to the price at which they can sell.

The law of supply states that the supply increases as the price increases, and falls when prices fall.
Because demand decreases when prices increase and vice versa, there is an inverse relationship between demand for
the product and its supply.
Determinants of Supply:

Economists break down the determinants of a firm's supply into 4 categories:

•Price
•Input Prices
•Technology
•Expectations
Price as a Determinant of Supply

Price is perhaps the most obvious determinant of supply. As the price of a firm's output increases, it
becomes more attractive to produce that output and firms will want to supply more. Economists refer to
the phenomenon that quantity supplied increases as price increases as the law of supply.
Input Prices as Determinants of Supply

Not surprisingly, firms consider the costs of their inputs to production as well as the price of their output
when making production decisions. Inputs to production, or factors of production, are things like labor and
capital, and all inputs to production come with their own prices.

When the prices of the inputs to production increase, it becomes less attractive to produce, and the quantity
that firms are willing to supply decreases. In contrast, firms are willing to supply more output when the prices
of the inputs to production decrease.
Technology as a Determinant of Supply

Technology, in an economic sense, refers to the processes by which inputs are turned into outputs. Technology
is said to increase when production gets more efficient. Take for example when firms can produce more output
than they could before from the same amount of input. Alternatively, an increase in technology could be
thought of as getting the same amount of output as before from fewer inputs.

Increases in technology make it more attractive to produce (since technology increases decrease per unit
production costs), so increases in technology increase the quantity supplied of a product. On the other hand,
decreases in technology make it less attractive to produce (since technology decreases increase per-unit costs),
so decreases in technology decrease the quantity supplied of a product.
Expectations as a Determinant of Supply
Just as with demand, expectations about the future determinants of supply, meaning future prices, future input
costs and future technology, often impact how much of a product a firm is willing to supply at present. Unlike
the other determinants of supply, however, the analysis of the effects of expectations must be undertaken on a
case by case basis.

Number of Sellers as a Determinant of Market Supply

Although not a determinant of individual firm supply, the number of sellers in a market is clearly an important
factor in calculating market supply. Not surprisingly, market supply increases when the number of sellers
increases, and market supply decreases when the number of sellers decreases.
Demand Forecasting

Introduction:

The information about the future is essential for both new firms and those planning to expand the scale of their production.
Demand forecasting refers to an estimate of future demand for the product. It is an “objective assessment of the future course
of demand”.

In recent times, forecasting plays an important role in business decision-making. Demand forecasting has an important
influence on production planning. It is essential for a firm to produce the required quantities at the right time.
Importance of Demand Forecasting

Demand Forecasting is the pivotal business process around which strategic and operational plans of a company are devised.
Based on the Demand Forecast, strategic and long-range plans of a business like budgeting, financial planning, sales and
marketing plans, capacity planning, risk assessment and mitigation plans are formulated.

Short to medium term tactical plans like pre-building, make-to-stock, make-to-order, contract manufacturing, supply
planning, network balancing, etc. are execution based. Demand Forecasting also facilitates important management activities
like decision making, performance evaluation, judicious allocation of resources in a constrained environment and business
expansion planning.
METHODS OF DEMAND FORECASTING

• There are various methods of demand forecasting differing in terms of their accuracy and sophistication.

• The methods of demand forecasting may be broadly divided into two categories:
1. Survey Method
2. Statistical Method
Survey Method

• The following are the important survey methods used for forecasting demand:

I. Collective opinion method

II. Delphi method
III. Consumers interview method
IV. Test marketing

Collective Opinion Method

⮚ This method is also known as “Sales Force Opinion” or “Sales Force Polling” or “Reaction Survey” method.
⮚ Under this method the responsibility for estimating the expected sales is placed on salesmen.
⮚ Salesmen being closest to the consumers have the knowledge of the requirements of the consumers, their reactions
to the product.
⮚ These estimates of individual salesmen are consolidated to find out the total estimated sales.
Advantages of Collective Opinion Method

⮚ The method is simple and easy to be used.

⮚ It involves minimum of statistical work and hence, does not require any technical
expertise.
⮚ It does not cost much.
⮚ It is realistic because it is based on personal and first hand knowledge of salesmen.
⮚ It is useful in forecasting the sales of new products.

Disadvantages of Collective Opinion Method

⮚ Being Subjective, the forecast is likely to be influenced by the personal bias of the
salesmen.
⮚ Salesmen may understate the forecast if their sales quotas are to be based on it.
⮚ Its usefulness is limited to the short period only.
⮚ The salesmen may not be aware of wider economic changes which affect demand.
Delphi Method

⮚ This technique was developed by Olaf Helmer, Dalkey and Gordon in the late 1940s.

⮚ Under this method a panel of internal and external experts are selected and theyare
kept physically away from each other.

⮚ There is a coordinator who acts as an intermediary among the panelists.

⮚ Coordinator prepares a questionnaire and sends it to the panelists. They express their views
anonymously.
⮚ Each expert will be given an opportunity to react to the reasons advanced by others.
⮚ The process will be repeated until some sort of unanimity is among all experts or issue causing the
disagreement are clearly defined.
⮚ It is more popular in forecasting non-economic rather than economic variables.

Advantages of Delphi Method

1. It does not take much time.

2. The cost is low.
3. The method is useful for new products

Disadvantages of Delphi Method

4. The opinions are subjective

5. Good and Bad estimates are given equal weightage
Economic factors may include costs such as wages, interest rates, governmental activity, laws, policies, tax
rates, and unemployment.

Some of the major non-economic factors with a significant impact on economic growth and social
development are: culture, religion, the role of family, class, tradition, role of the individual, social and political
dependence, the role of government, religion, corruption

Consumers’ interview method

⮚ It is the most direct method of estimating the demand for the short period.

⮚ It is also known as “Survey of Buyers” or “opinion Survey” method.

⮚ In this method the consumers are contacted personally to know about their plans and preferences
regarding the purchase of he product.
• Consumer survey method has three different types:
Complete enumeration method

⮚ Under this method all the consumers of the product are interviewed and on the basis of the information collected,
the demand forecast is made.

Sample survey method

⮚ When the number of consumers is large, this method is used.

⮚ In this method few selected consumers are interviewed.

⮚ The selection of the consumer is done through random, stratified sampling technique.

⮚ This method is based on the assumption that the selected sample represents the population.
Consumer’s End Use Method

⮚ This method focuses on forecasting the demand for intermediary goods.

⮚ The demand for the good in different uses is taken into consideration.

Example:

1. Milk is commodity which can be used as an intermediary good for the production of ice cream and other dairy
products.

2. Cement may be used for constructing houses, hotels, bridges, etc.

Advantages of Consumer survey method

⮚ This method is free from any personal bias of the forecaster.

⮚ The forecast is based on the first hand information from the consumers.

⮚ The sample survey is less costly and less time consuming than complete enumeration, but equally reliable if the sample
is representative in character.

Disadvantages of Consumer survey method

⮚ The Complete enumeration method is very costly

⮚ It is time consuming

⮚ The manpower required for the survey is also large

⮚ The method cannot be used if the number of consumers is very large and scattered

⮚ The method is not reliable because, In the case of household consumers, there is no regularity of intentions

⮚ Faced with multiple choices or alternatives, they cannot predict their own choices.
Test marketing
⮚ Test marketing is used to forecast the demand or sales for the new product
⮚ In this method a test is selected. It may be a region, city or state which is the representative of the total market
⮚ After the selection of test area product will be launched in the area
⮚ If the product is successful in the test area, the forecast will be that similar levels of success will be achieved in the total
market.

Advantages of Test marketing

⮚ It is a real life experiment
⮚ It is possible to know the reactions of consumers

Disadvantages of test marketing

⮚ It is costly
⮚ It is time consuming
⮚ There is the danger of making of false forecasts from the initial response of the consumers
⮚ It is difficult to select the test area which is representative of the whole market
⮚ It is possible for rivals to immediately imitate the product and take advantage of test marketing without incurring the cost
of this exercise.
Statistical Methods

Most of the statistical methods are highly complex and some of them require considerable knowledge of statistics and
mathematics.

Some of the important statistical techniques are as follows:

1. Trend projection method
2. Correlation and regression method
3. Barometric technique
Trend Projection Method

⮚ Data of a firm which has been in business for a long period of time are arranged chronologically which is called as the
Time Series.
⮚ Time series relating to sales represents the past pattern of demand for a particular product
⮚ On the basis of such data future trend of sales or demand may be projected.
⮚ The method rests on the assumption that the past trend will continue in the future also.

Advantages of Trend Projection Method

⮚ It is a simple statistical technique
⮚ It is inexpensive
⮚ It does not require much time

Disadvantages of Trend Projection Method

⮚ It can be used only if past data of sales are variable

⮚ If there are too many irregular or random fluctuations in the time series data, the forecasting is difficult
TREND PROJECTION

Trends refer the long term persistent movement of data in one direction upward or downward.

There are 2 important methods for trend projection.

1. Method of moving averages.
2. Least square method.

LEAST SQUARE METHOD

⮚ The trend line if fitted by developing an equation giving the nature and magnitude of the trend. The common technique used
in constructing the line of best fits is by the method of least squares.

⮚ The trend is assumed to be linear. The equation for straight line trend is y=a+bx.

⮚ Where “a” is the intersect and “b” shows the impact of independent variable. Sales are dependant on variable “y” since sales
vary with time periods which will be the independent variable “x” Thus “y” intercept and the slope of line are formed by
making appropriate substitutions in the following normal equations.

ΣY = na+bΣx --------------(1)
ΣXY = aΣx + bΣx2----------------- (2)
Correlation and Regression Method

⮚ This method makes use of statistical and econometric techniques to find out the nature and extent of relationship
between variables.

⮚ Under this method the relationship between the sales and other variables is determined on the basis of past data

⮚ If there is only one independent variable in the functional relationship, it is called as the simple correlation

⮚ Multiple correlation refers to the function in which there are several independent variables in the functional
relationship.

⮚ A regression equation is used to show the relationship between sales and several independent variables

⮚ The aim of regression and correlation analysis is to separate and measure the relation between variation in sales and
the corresponding changes in the main determinants of demand
 Advantages of Correlation and Regression Technique

⮚ The forecast can be made quickly

⮚ It is inexpensive

Disadvantages of Correlation and Regression technique

⮚ It is difficult to understand the method

⮚ It can be used only in the case of established product

https://www.economicsdiscussion.net/demand-forecasting/techniques-of-demand-forecasting-survey-and-statistical-methods/3
611
Barometric Method:
In barometric method, demand is predicted on the basis of past events or key variables occurring in the present. This
method is also used to predict various economic indicators, such as saving, investment, and income. This method was
introduced by Harvard Economic Service in 1920 and further revised by National Bureau of Economic Research
(NBER) in 1930s.

This technique helps in determining the general trend of business activities.

For example,

⮚ suppose government allots land to the XYZ society for constructing buildings. This indicates that there would be
high demand for cement, bricks, and steel.

⮚ Performance of a Company indicates rise in its share price

⮚ New entrants into a colony indicates increase in demand for a cable tv connection

⮚ Employees are asked to stop work from home and come to the Office indicates increase in demand for Cabs.

⮚ Decisions taken during budget sessions indicate increase or decrease in demand for certain goods and services.
Advantages of barometric technique

⮚ It is simple
⮚ The forecast can be made quickly

Disadvantages of barometric technique

⮚ It is difficult to choose a relevant indicator for a particular product

⮚ Sometimes, even if an indicator is found out, change in fashions or tastes may render the
indicator redundant overtime
https://www.brainkart.com/article/Solved-Example-Problems-for-Regression-Analysis_37036/#:~:text=%E2%88%91X%3D15%2C
%20%E2%88%91Y%3D25%2C%20%E2%88%91X,11.&text=The%20equations%20of%20two%20lines,and%202Y%3D5%E2%80%9
3X%20