In: Statistics and Probability
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
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.