ECON 1030 - BUSINESS STATISTICS 1 PROJECT (FRIDAY) Instructions: This is a project where you can work alone or with two other students (a maximum group size of three). All group members will receive the same marks for the assignment. All group members must be enrolled in the same tutorial. The assignment must be provided in the form of a (brief) business report approximately 8-14 pages. You must submit an electronic copy of your assignment in Blackboard. Hard copies will not be accepted. SHOW YOUR WORK for calculation based questions. This assignment requires the use of Microsoft Excel. If you have Windows, you will also need to use the Data Analysis ToolPak. If you have a Mac with Excel 2011, you will need to use StatPlus:MAC LE. Problem Description: The Motion Picture Distributors Association of Australia has contacted us to explore recent film watching habits in theatres from the United States. It believes that sequels are increasingly a box office draw and that new intellectual properties are not receiving much attention. A sample of 77 films playing in 2015 through the United States has been collected. Several characteristics including gross revenue, the number of theatres screened, the metacritic score, whether it is a sequel as well as the genre have been included in the table. You will use descriptive statistics, inferential statistics and your knowledge of multiple linear regression to complete this task. Price (Dependent Variable) and several characteristics (Independent Variables) are given in the Excel file: Friday.xlsx. Here is a table describing the variables in the data set: Variable Gross Theatres Metacritic Sequel/Reboot Action Animation Comedy Drama Thriller Definition Gross Revenue in Millions of US$ Number of theatres that screened the film Metacritic score of the film Dummy variable to indicate the film is either a sequel or a reboot of the franchise Dummy variable to indicate that the film is an action film Dummy variable to indicate that the film is an animation Dummy variable to indicate that the film is a comedy film Dummy variable to indicate that the film is a drama Dummy variable to indicate that the film is a thriller or horror film Required: A. Film critics also claim that film audiences do not care about the quality of the film. Any action film guarantees that it will gross more than $100 million. Test their claim at the 10% level of significance. (1 Mark) B. Run a multiple linear regression using the data and show the output from Excel. Exclude the dummy variable \"Thriller\" from the regression results. (1 Mark) C. Is the coefficient estimate for Theatres statistically different than zero at the 5% level of significance? Set-up the correct hypothesis test using the results found in the table in Part (G) using both the critical value and p-value approach. Interpret the coefficient estimate of the slope. (2 Marks) D. Interpret the remaining slope coefficient estimates. Discuss whether the signs are what you are expecting and explain your reasoning. (2 Marks) E. Interpret the value of the Adjusted R 2. Is there a large difference between the R 2 and the Adjusted R2? If so, what may explain the reasoning for this? (1/2 Mark) F. Is the overall model statistically significant at the 5% level of significance? Use the p-value approach. (1/2 Mark) G. Based on the results of the regressions, what other factors would have influenced the gross revenue? Provide a couple possible examples and indicate their predicted relationship with the gross revenue if they were included. (1 Mark) H. Predict the average gross revenue of an action film with a metacritic score of 30 if it shows in 4,000 theatres, but it is not a sequel or a reboot if it is appropriate to do so. Show the predicted regression equation. (1 Mark) I. Do the results suggest that the data satisfy the assumptions of a linear regression: Linearity, Normality of the Errors, and Homoscedasticity of Errors? Show using scatter diagrams, normal probability plots and/or histograms and Explain. (2 Marks) J. Would these results likely tell us anything about how well Australian-made films will perform in Australia? If not, describe a scenario in how you would construct a sample of Australian films to predict their performance. (1 Mark) Film Jurassic World Avengers: Age of Ultron Furious 7 American Sniper Minions The Hunger Games: Mockingjay - Part 2 Pitch Perfect 2 Hotel Transylvania 2 Fifty Shades of Grey The Peanuts Movie Creed Get Hard Terminator: Genisys Sisters Goosebumps The Intern The Big Short The Wedding Ringer The Perfect Guy Joy The Hateful Eight Southpaw Insidious Chapter 3 Selma Jupiter Ascending Sicario McFarland, USA The Night Before Krampus The Age of Adaline Brooklyn The DUFF Woman in Gold Unfriended Chappie Crimson Peak Sinister 2 The Last Witch Hunter Ricki and the Flash The Lazarus Effect Ex Machina The Gallows Black or White Aloha The Secret in their Eyes (2015) Shaun the Sheep Movie Still Alice Paranormal Activity: The Ghost Dimension Mr. Holmes Gross 652.27 459.01 353.01 350.13 336.05 281.72 184.30 169.70 166.17 130.18 109.77 90.41 89.76 87.04 80.08 75.76 70.26 64.46 57.03 56.45 54.12 52.42 52.22 52.08 47.39 46.89 44.48 43.05 42.73 42.63 38.32 34.03 33.31 32.48 31.57 31.09 27.74 27.37 26.82 25.80 25.44 22.76 21.57 21.07 20.18 19.38 18.75 18.30 17.74 Theatres Metacritic Sequel/RebAction 4,291 59 1 4,276 66 1 4,022 67 1 3,885 72 0 4,311 56 1 4,175 65 1 3,660 63 1 3,768 44 1 3,655 46 0 3,902 67 1 3,502 82 1 3,212 34 0 3,783 38 1 2,978 58 0 3,618 60 0 3,320 51 0 2,529 81 0 3,003 35 0 2,230 36 0 2,924 56 0 2,938 68 0 2,772 57 0 3,014 52 1 2,235 89 0 3,181 40 0 2,620 81 0 2,792 60 0 2,960 58 0 2,919 49 0 3,070 51 0 962 87 0 2,622 56 0 2,011 51 0 2,775 59 0 3,201 41 0 2,991 66 0 2,799 32 1 3,082 34 0 2,064 54 0 2,666 31 0 2,004 78 0 2,720 30 0 1,823 45 0 2,815 40 0 2,392 80 0 2,360 81 0 1,318 72 0 1,656 30 1 898 67 1 1 1 1 1 0 1 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 Seventh Son The Transporter Refueled American Ultra Woodlawn Burnt Do You Believe? Strange Magic Self/Less Far from the Madding Crowd The 33 Foxcatcher Unfinished Business Inherent Vice Trumbo (2015) While We're Young The Green Inferno Our Brand Is Crisis (2015) Grandma (2015) The Loft A Most Violent Year Danny Collins 90 Minutes in Heaven Irrational Man Rock The Kasbah Truth Jem and the Holograms The Diary of a Teenage Girl The D Train 17.22 16.03 14.44 14.39 13.65 12.99 12.43 12.28 12.24 12.23 12.10 10.22 8.11 7.86 7.59 7.19 7.00 6.98 6.00 5.75 5.64 4.84 4.03 3.02 2.54 2.18 1.48 0.67 2,875 3,434 2,778 1,553 3,003 1,356 3,020 2,353 902 2,452 759 2,777 653 660 762 1,543 2,202 1,061 1,841 818 739 899 925 2,012 1,122 2,417 795 1,009 30 32 50 57 42 22 25 34 71 55 81 32 81 60 77 38 53 77 24 79 58 28 53 29 66 42 87 55 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 Animation Comedy 0 0 0 0 1 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 Drama 0 0 0 0 0 0 1 0 0 0 0 1 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 Thriller 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 1 0 0 1 1 1 0 1 0 0 1 0 0 1 1 0 1 0 0 0 0 0 1 0 1 0 1 0 1 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 0 1 1 0 0 1 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 1 0 0 1 0 0 1 0 0 0 0 0 1 0 0 0 1 0 0 0 1 1 1 0 0 1 1 1 0 1 1 0 0 1 0 0 0 1 1 1 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 1 0 0 0 0 0 0 0 0 0