Solved – Regression of data that includes a date

multiple regressionrtime series

I have a dataset that contains a few hundred transactions from a three suppliers operating in 100+ countries over a three year period.

We've found that the country of sales is not a significant factor in the prices achieved (the products are more or less global commodities). All of the prices have declined significantly over time. Any one day can have multiple transactions at different prices from the same supplier (i.e. in different countries).

I would like to test whether there is a statistically significant difference in the prices charged by the different suppliers.

The data look something like this:

    Country X  1/1/2010  $200 Supplier A
    Country Y  1/1/2010  $209 Supplier A
    Country Z  1/1/2010  $187 Supplier A
    Country A  1/1/2010  $200 Supplier B
    Country X  1/2/2010  $188 Supplier B

Any ideas on how to do this?…..

Best Answer

It sounds to like you need use time series methods, such as ARMA or ARIMA, that let you calculate a regression using time as an independent variable without violating the independent observations assumption of OLS.

You may want to try a two step analysis: - first use time as a single predictor variable and use a suitable time series method - two see if there is any meaningful difference in residuals between the two suppliers. (A simple t-test might be sufficient.)

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