RKO Movie Earnings and Costs

Dataset: rko_film_19301941.dat

Source: J. Sedgwick (1994). "Richard B. Jewell's RKO Film Grosses, 1929-1951:The C.J. Trevlin Ledger: A Comment", Historical Journal of Film, Radio &Television, Vol.14, Issue 1, p. 51

Description: Costs and Earnings of 155 RKO movies from 1930-1941.

Variables/Columns

Film 1-25

Re-release dummy 33 /* 1=Re-release, 0 if not

Production costs ($1000s) 36-41

Domestic Revenue ($1000s) 44-49

Foreign Revenue ($1000s) 53-57

Total Revenue ($1000s) 61-65

Profits ($1000s) 68-73

Distribution Cost($1000s) 76-81

Dist Cost/Revenue 83-88

Dist Cost/Prod Cost 91-97

Year 100-104

100*Profit/(Prod+dist cost) 106-111

A study reported various costs and revenues for movies released by RKO during the years 1930-1941. Fit linear regression models relating Total Revenue to Total Cost (Distribution + Production) by completing the following parts.

p.1.a. Fit a simple linear regression model based on ordinary least squares. Give the fitted equation, estimated standard errors, and the estimate ofs

p.1.b. Plot the residuals, absolute residuals, and squared residuals versus the fitted values

p.1.c. Obtain the correlations between the absolute residuals and fitted values and squared residuals and fitted values

p.1.d. Obtain the Weighted Least Squares estimator b_W in matrix form (iteratively) based on the model that the standard deviation ofe is proportional to the mean. Give the point estimates and standard errors of the regression coefficients.

p.1.e. Using the gls function in the nlmepackage to obtain the generalized least squares estimates using the power relation: