Here is the regression for Exercise 3 with an indicator variable:

Dependent variable is: US Gross($M)
R-squared = 0.193, Adjusted R-squared: 0.166
s = 37.01 with 62 - 3 = 59 degrees of freedom

a) Write out the regression model.
b) In this regression, the variable R Rating is an indicator variable that is 1 for movies that have an R rating. How would you interpret the coefficient of R Rating?
c) What null hypothesis can we test with the t-ratio for R Rating?
d) Can you reject the null hypothesis of part c? Explain.

Transcribed Image Text:

150 100 . g 50. '. 50 100 150 Budget ($M) Variable Coefficient SE(Coeff) t-ratio P-value Intercept 49.2642 12.5736 3.918 0.000235 Budget R Rating -12.4871 11.2145 -1.113 0.270018 0.3292 0.1264 2.605 0.011612