Executive Summary: Recommendation for International Office Expansion According to the results of Multiple Linear Regress

Executive Summary: Recommendation for International Office Expansion

According to the results of Multiple Linear Regression (MLR) analysis and the summary statistics, I advise opening a second office in Prague, followed by offices in Warsaw and Athens. To make this decision, we review leading Cost of Living Index predictors, test their statistical importance and compare the most important factors with New York City (NYC) as a standard. (Mercer Human Resource Consulting, 2018).

Results from the MLR suggests that the hypothesis was accepted as statistically significant (p-value < 0.0004963), with 81.2% of the changes in the Cost of Living Index explained by the model. Two conditions, Monthly Public Transit Pass (p = 0.029390372) and Loaf of Bread (p = 0.173964311), were proven to be statistically significant in the study. These numbers largely determine why living costs aren’t the same everywhere.

When we look at these main predictors, the descriptive statistics provide this information for Monthly Public Transit Pass: mean ($78.29), median ($74.28), Q1 ($57.68), Q3 ($105.93), min ($41.20) and max ($179.31). Examples of Loaf of Bread: avg ($1.47), median ($1.37), Q1 ($1.04), Q3 ($1.73), min ($0.41) and max ($2.93). NYC has both a Monthly Public Transit Pass, at $121.00 and a Loaf of Bread, at $2.93, that are both significantly higher than the average and near the highest values in the dataset.

Prague ranks highest on the list, with a Cost of Living Index of 50.95, much lower than NYC’s 100 index. Living here will save you money on both your monthly public transport and a loaf of bread because both come at cheaper prices. Second on our list, Warsaw (Cost of Living Index: 45.45) has a Monthly Public Transit Pass for only $30.03 (below Q1) and Loaf of Bread at $1.68 (just above the median). The Housing Costs Index for Athens (63.06) comes above the Quartile 1 average and Monthly Pass public transport is $35.31 (below Q1) and Loaf of Bread $1.38 (rests at the median range). All these cities have transit that is cheaper than the U.S. median and a living cost that is typically lower than NYC. (Wooldridge, 2019).

Places like London and Sydney fare less attractively because the monthly cost of using public transit is much higher, at almost NYC rates. Prague, Warsaw and Athens are the most practical and economical cities for growing our network.

 References

Mercer Human Resource Consulting. (2018). Cost of Living Data.

Wooldridge, J. M. (2019). Introductory Econometrics: A Modern Approach (7th ed.). Cengage Learning.