Question

In: Statistics and Probability

The owner of Showtime Movie Theaters, Inc., used multiple regression analysis to predict gross revenue ()...

The owner of Showtime Movie Theaters, Inc., used multiple regression analysis to predict gross revenue () as a function of television advertising () and newspaper advertising ().

Weekly Gross Revenue
(s)
Televison Advertising
(s)
Newspaper Advertising
(s)
97 6 2.5
90 3 2
95 5 2.5
92 2.5 3.5
96 3 4.3
94 3.5 3.3
95 3.5 4.2
95 4 3.5

The estimated regression equation was .

The computer solution provided .

a. Compute  (to 3 decimals).

Compute  (to 3 decimals).

b. When television advertising was the only independent variable,  and . Are the multiple regression analysis results preferable?

- Select your answer -No, because less variability is explained when both independent variables are usedYes, because greater variability is explained when both independent variables are usedItem 3

Solutions

Expert Solution

1) The estimated regression equation was

Gross revenue=79.7364+1.9434 TV Advertising+2.2029 News Advertising

R square value=95.10%,

2) When television advertising was the only independent variable, the regression equation becomes

Gross revenue=89.4686+1.2541 TV Advertising

R square value=41.95%% . Since the R square value is almost half the earlier, our conclusion is

Yes, because greater variability is explained when both independent variables are used

For any query in above, comment.


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