Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in several markets in the southern U.S. The owners would like to estimate weekly gross revenue as a function of advertising expenditures. Data for a sample of eight markets for a recent week follow. Market Weekly Gross Revenue ($100s) Television Advertising ($100s) Newspaper Advertising ($100s) Mobile 101.3 4.9 1.4 Shreveport 52.9 3.1 3.2 Jackson 75.8 4.2 1.5 Birmingham 127.2 4.5 4.3 Little Rock 137.8 3.6 4 Biloxi 102.4 3.5 2.3 New Orleans 236.8 5 8.4 Baton Rouge 220.6 6.8 5.9 Use the data to develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables. Let x1 represent the amount of television advertising. Let x2 represent the amount of newspaper advertising. If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300) Test whether each of the regression parameters β0, β1, and β2 is equal to zero at a 0.05 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable? How much of the variation in the sample values of weekly gross revenue does the model in part above explain? Given the results in part (a) and part (c), what should your next step be? Explain. What are the managerial implications of these results?
Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in several markets in the southern U.S. The owners would like to estimate weekly gross revenue as a
Market |
Weekly Gross Revenue ($100s) |
Television Advertising ($100s) |
Newspaper Advertising ($100s) |
|
| Mobile | 101.3 | 4.9 | 1.4 | |
| Shreveport | 52.9 | 3.1 | 3.2 | |
| Jackson | 75.8 | 4.2 | 1.5 | |
| Birmingham | 127.2 | 4.5 | 4.3 | |
| Little Rock | 137.8 | 3.6 | 4 | |
| Biloxi | 102.4 | 3.5 | 2.3 | |
| New Orleans | 236.8 | 5 | 8.4 | |
| Baton Rouge | 220.6 | 6.8 | 5.9 |
Use the data to develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables.
Let x1 represent the amount of television advertising.
Let x2 represent the amount of newspaper advertising.
If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a + sign before the blank. (Example: -300)
Test whether each of the regression parameters β0, β1, and β2 is equal to zero at a 0.05 level of significance. What are the correct interpretations of the estimated regression parameters? Are these interpretations reasonable?
How much of the variation in the sample values of weekly gross revenue does the model in part above explain?
Given the results in part (a) and part (c), what should your next step be? Explain.
What are the managerial implications of these results?
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