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Definitions must first be laid out in order to classify the variables in question as dependent, independent, moderating, extraneous, or intervening. During an experiment, the person conducting the experiment changes the independent variable. Cooper defines the independent variable as the variable that “is manipulated by the researcher, and the manipulation causes an effect on the dependent variable. We recognize that there are often several independent variables and that they are probably at least somewhat “correlated” and therefore not independent among themselves” (Cooper). This manipulation in the independent variable has an effect on the dependent variable. Therefore, in this experiment, the independent variable is per capita income.

When the independent variable is changed, the change in the dependent variable is observed and recorded. Thus, the dependent and independent variable are related. Cooper defines the dependent variable as the variable that “is measured, predicted, or otherwise monitored and is expected to be affected by manipulation of an independent variable” (Cooper). The dependent variable refers to the variable that is being tested in a scientific experiment. Dependent variables are dependent upon and obtain their value from independent variables. The dependent variable is the variable that is being measured by the person conducting the experiment. Therefore, in this experiment, the dependent variable is car sales. “Economic development has historically been strongly associated with an increase in the demand for transportation and particularly in the number of road vehicles.

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This relationship is also evident in the developing economies today” (Dargay, 2007). A moderating variable is a variable that is essentially a second independent variable that has an effect on how the independent variable and dependent variable interact. In this experiment, the moderating variables are the interest rates. The reason that interest rates are a moderating variable instead of an independent variable is due to the fact that interest rates do not have quite the effect on car sales that per capita income does.

Car buyers must have the income necessary to purchase a new car. Interest rates are secondary to that thus making them a moderating variable. An extraneous variable is a variable that the experimenter is not studying in the experiment. In a perfect world, all that would be included in a study would be the independent variable and the dependent variable. However, this is not the case and many experiments contain a vast array of undesirable variables. Several such undesirable, extraneous variables exist within this experiment. Age, gender, competitor advertising, competitor dealer discounts, and introductions of new competitive models are all examples of extraneous variables. An intervening variable is a variable that theoretically affects the dependent variable.

The intervening variable usually cannot be observed in an experiment. There is an association between the independent variable, per capita income, and the dependent variable, car sales. Age and gender links this association between per capita income and car sales. b. Comment on the utility of a model based on the hypothesis. The hypothesis in question is that demand for a certain brand will increase as per capita income increases.

A study in Poland showed that: “Diversification of household equipment in cars is highly dependent on household’s income situation. The richest households are much better equipped with cars than poorer ones” (Nieströj, 2014). Based on the hypothesis, the utility of the model will provide useful data. The establishment of the independent and dependent variable is essential to an accurate model. Additional variables provide useful insight into the relationship between the independent and dependent variables.

As researchers, we hypothesize, plan, identify variables, and perform experiments in order to plan for the future. No matter how we plan, we can rest easy knowing that the Lord’s Word holds true and that the Lord comforts us in Jeremiah 29:11. “For I know the plans I have for you, plans to prosper you and not to harm you, plans to give you hope and a future.” Every step in life, research, and business has been laid out before we even began planning.