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EC5203 Assignment

Opening Case and Case Study 2

Name: Shannon Frick

Student ID: 11159183

Subject Name: Statistics for Business

Subject Code: EC5203

Subject Coordinator: Shane Zhang

Due Date: 16th June, 2009


Table of Contents

Table of Contents.................................................................................................................2
Opening Case.......................................................................................................................3
Strong Predictor Variables of Gross Box Office Takings ...............................................4
Other Potentially Relevant Variables...............................................................................5
Results..............................................................................................................................5
Developed Mathematical Model
..........................................................................................................................................7
Strength of the Model......................................................................................................7
The Need for Multiple Regression...................................................................................8
Case Study 2........................................................................................................................9
1.Multiple Regression Model: Admissions..........................................................................9
Introduction....................................................................................................................10
Results............................................................................................................................10
Coefficient of Multiple Determination: r2 and Adjusted r2...........................................12
Linear Equation for Multiple Regression......................................................................12
Significance of Dependent Variables to the Multiple Linear Regression......................13
Conclusion: Implications of Analysis............................................................................14
2. Other Relevant Variables...............................................................................................15
3. Multiple Regression Model: Movies Seen.....................................................................16
Introduction....................................................................................................................17
Results
........................................................................................................................................17
Coefficient of Multiple Determination: r2 and Adjusted r2...........................................19
Linear Equation for Multiple Regression......................................................................19
Significance of Dependent Variables to the Multiple Linear Regression......................20
Conclusion: Marketing Implications of Analysis..........................................................21

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Opening Case

The following data is provided by the Motion Picture Distributors Association of


Australia, and relates to the gross box office takings of the yearly top movies in
Australia from 1986 to 2004. There is also information relating to total cinema
attendance in these years, the total number of screens (the most popular films
are often shown in two or more screens simultaneously in some of the larger
multi-screen cinemas) and total number of films shown in the year (this could act
as a measure of competition for the leading movies).

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1. Dependent and Independent Variables

Several variables are presented that may be related to the yearly gross box
office takings of the top Australian film. Which variables are stronger predictors
of gross box office takings? Might other variables not mentioned here be related
to gross box office takings?

Strong Predictor Variables of Gross Box Office Takings

From observation of the graph above, Total Australian Admissions and


Screenings, there are several assumptions that can be made. First, it is evident
that the variable “Year” is a label for each year, and is most likely not particularly
useful for making future predictions regarding gross box office takings. Secondly,
the title of the movie shown in the Number 1 film column in this table can also be
assumed to be irrelevant for future predictions involving gross box office takings.
With these two columns excluded for statistical purposes, the remaining variables
that will be looked at for this part will be “Number of Admissions (millions),”
“Number of Films Screened,” “Number of Screens,” and “Box Office ($ million).”

The dependent variable in this section is “Box Office (millions),” since this
is the variable around which relationships are being questioned. This deems
“Number of Admissions,” “Number of Films Screened,” and “Number of Screens”
as dependent variables for this case.

The independent variables’ strength in predicting the gross Box Office


takings for a given year can be found when performing a multiple linear
regression. For this assignment, an Excel add-in tool for the multiple linear
regression calculations called PHStat has been used. The PHStat tool greatly
reduces the time and effort required to perform a multiple linear regression
analysis, along with providing ANOVA and residual error calculations. The output
for the multiple linear regression modeling is given below in the section titled
“Mathematical Model to Predict Gross Box Office Takings.”

While the multiple linear regression analysis in subsequent paragraphs


below will show how weak the relationship is between the dependent and
independent variables, it should be noted that the strongest relationship is that
between “Number of Admissions” and “Box Office (millions).” This seems to
make sense, since the more viewers are admitted to a movie, the more payment
i.e. gross box office takings the cinemas will receive.

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Other Potentially Relevant Variables

Apart from the given independent variables of “Number of Admissions,”


“Number of Films Screened,” and “Number of Screens,” there could be a number
of other unmentioned variables that might affect the Gross Box Office Takings.
Some of these variables are included in Part 2 of this assignment, such as:

o “Theatres”
o “Top Price of Cinema Tickets”
o “Capacity”
o “Age”
o “No. of Emailed Discount Cinema Tickets Received Last Year”
o “Income (‘000s)”

Other perhaps important variables that have been omitted from the data,
which are also mentioned in Part 2 of the assignment, may be:

o Screening Times During the Day


o Screening Times During the Year
o Location of Cinema
o Gender, Nationality, Religion or Political View
o Genre of the Film (Horror/Comedy/etc)
o Amount ($) Spent on Advertising for the Film

2. Mathematical Model to Predict Gross Box Office


Takings

Is it possible to develop a mathematical model to predict gross box office takings


using the data given? If so, how strong is the model? With three independent
variables, will we need to develop three different simple regression models and
compare their results?

Results

Regression Analysis

Regression Statistics
Multiple R 0.644693511
R Square 0.415629723
Adjusted R Square 0.298755668
Standard Error 8.884734142
Observations 19

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ANOVA
Significance
df SS MS F F
Regression 3.00000 842.16776 280.72259 3.55622 0.04006
Residual 15.00000 1184.07751 78.93850
Total 18.00000 2026.24527

Standard Upper
Coefficients Error t Stat P-value Lower 95% 95%
Intercept -5.71881 25.95778 -0.22031 0.82860 -61.04651 49.60889
Number of
Admissions
(millions) -0.10880 0.36397 -0.29894 0.76909 -0.88459 0.66698
Number of films
screened 0.07348 0.10052 0.73095 0.47608 -0.14078 0.28773
Number of
Screens 0.01799 0.01692 1.06357 0.30435 -0.01807 0.05405

RESIDUAL OUTPUT

Observation Predicted Box Office ($ million) Residuals


1 20.14328 20.65672
2 21.56637 -10.16637
3 23.67032 1.22968
4 25.31063 -9.52063
5 23.43136 2.66864
6 22.73710 -3.51710
7 22.27410 -3.54410
8 24.38503 7.35497
9 23.88529 0.76471
10 25.72425 -7.79425
11 29.39766 -0.10766
12 32.54003 -9.84003
13 33.99416 13.33584
14 34.89610 3.82390
15 36.40136 -5.68136
16 35.59706 -3.54706
17 36.85815 -3.04815
18 38.51647 -1.37647
19 42.04129 8.30871

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Developed Mathematical Model

Using multiple linear regression analysis, it is possible to develop a


mathematical model to predict gross box office takings using the data table
above. The results of a multiple linear regression using PHStat with the
mentioned dependent and independent variables are given below under the
heading “Results.”

From the given results (above under the heading Results), we can form a
multiple linear regression model based on the coefficients from the results, which
can be used to create a mathematical formula that could predict potential future
values for gross box office takings.

The form of the multiple linear regression equation will be:

Ŷ = b0 + b1X1+ b2X2 + b3X3

where:

Ŷ = Box Office ($ millions)


b0 = Intercept (i.e. when Y = 0)
X1 = Number of Admissions (millions)
b1 = rate of increase of Box Office ($ million) given Number of Admissions
(millions)
X2 = Number of Films Screened
b2 = rate of increase of Box Office ($ million) given Number of Films
Screened
X3 = Number of Screens
B3 = rate of increase of Box Office ($ million) given Number of Screens

Therefore, the final equation for predicting gross box office takings is:

Box Office ($ million) = -5.7188 - 0.1088(Number of Admissions(millions)) +


0.0735 (Number of Films Screened) + 0.01799(Number of Screens)

Strength of the Model

The r2 value (“r square”) of roughly 0.41563 indicates that approximately


41.56% of the variation in the dependent variable “Box Office ($ million)” can be
explained by the independent variables used, “Number of Admissions,” “Number
of Films Screened,” and “Number of Screens.” This is a weak linear relationship

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that suggests there may not be such a strong relationship between the
dependent and independent variables.

The adjusted r2 value of 0.29875 suggests that approximately 29.88% of


“Box Office ($ million)” can be explained by all the aforementioned dependent
variables, while also taking into account the sample size and number of
independent variables. This further substantiates the notion that there is a very
weak linear relationship between the dependent and independent variables.

The Need for Multiple Regression

As shown above, we have not needed three different simple regression


models to compare their results, since multiple linear regression has done the job
quite adequately for the three independent variables. In fact, it is preferable to
perform multiple linear regression analysis instead of performing several
instances of single linear regression analysis due to the fact that multiple
regression takes into account relationships between independent variables and
the dependent variable at the same time, whereas three separate single linear
regression models would not take into account the effect that each relationship
would have on the other when calculating relationships with the dependent and
independent variables.

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Case Study 2
1. Multiple Regression Model: Admissions

The following data corresponds to the annual number of admissions (in


millions) to the movies in Australia over the years 1984 to 2004. It also
contains the yearly totals of the numbers of screens, theatres and films
screened, as well as the top price paid for a cinema ticket. Using these data,
develop a multiple regression model to study how well the number of annual
cinema admissions can be explained by the other variables. Which variables
seem to be more promising predictors? What implications for film distributor
executives might be evident from this analysis?

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Introduction

For this part of the assignment, an Excel add-in tool for the multiple linear
regression calculations called PHStat was used. This tool greatly reduces the
time and effort required to perform a multiple linear regression analysis. The
output for the multiple linear regression modeling is shown below.

In order to accurately perform the regression analysis, it must be confirmed


that the regression modeling is accurate. In doing so, the following assumptions
will be made:

 “Year” is not a variable, but rather, a label for each observation.


 The dependant variable in this analysis is “No. of admissions (millions).”
 The independent variables in this analysis are “Year,” “No. of Screens,”
“Theatres,” “No. of Films Screened,” “Top Price of Cinema Tickets,” and
“Capacity (000 seats).”
 Residuals in the model are normally distributed, have constant variance,
and are independent.
 We will use a confidence level for regression coefficients of 95%, such that
α = 0.05.

Results
The results for the multiple linear regression analysis are given below:

Regression Statistics
Multiple R 0.987125975
R Square 0.974417691
Adjusted R Square 0.965890255
Standard Error 4.36021864
Observations 21

ANOVA
df SS MS F Significance F
Regression 5 10862.0855 2172.417099 114.2685399 2.1558E-11
Residual 15 285.1725988 19.01150659
Total 20 11147.2581

Standard Lower Upper


Coefficients Error t Stat P-value 95% 95%
Intercept 55.1391 32.2236 1.7111 0.1076 -13.5439 123.8222
No of screens 0.1199 0.0226 5.3155 0.0001 0.0718 0.1680
Theatres 0.0725 0.0349 2.0750 0.0556 -0.0020 0.1469
No of films
screened 0.0474 0.0491 0.9650 0.3498 -0.0573 0.1522
Top price of
cinema ticket ($) -2.5388 2.0464 -1.2406 0.2338 -6.9007 1.8230

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Capacity (000
seats) -0.4447 0.1080 -4.1164 0.0009 -0.6750 -0.2144

Observation Predicted No. of admissions (millions) Residuals


1 29.7170 -0.8170
2 31.7007 -2.0007
3 32.9106 2.5894
4 25.0980 5.7020
5 40.6546 -3.2546
6 43.9614 -4.9614
7 46.9636 -3.9636
8 47.4028 -0.5028
9 50.7525 -3.5525
10 56.3712 -0.8712
11 61.3113 6.7887
12 65.7125 4.1875
13 68.3302 5.5698
14 76.1044 -0.1044
15 82.7255 -2.7255
16 88.7593 -0.7593
17 89.2581 -7.0581
18 88.6222 3.8778
19 89.5627 2.9373
20 90.2856 -0.4856
21 92.0960 -0.5960

Confidence Interval Estimate and Prediction Interval


t Statistic 2.13145
Predicted Y (YHat) 55.13912

For Average Predicted Y (YHat)


Interval Half Width 68.68304
Confidence Interval Lower Limit -13.5439
Confidence Interval Upper Limit 123.8222

For Individual Response Y


Interval Half Width 69.30896
Prediction Interval Lower Limit -14.1698
Prediction Interval Upper Limit 124.4481

The given Regression Analysis above presents several key statistics that
are useful for further analysis. These include regression statistics such as r2,
ANOVA (analysis of variance) statistics, and confidence interval estimates.
These are discussed below in more detail.

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Coefficient of Multiple Determination: r2 and Adjusted r2

The r2 value (“r square”) of roughly 0.97442 indicates that approximately


97.44% of the variation in the dependent variable “Number of Admissions” can be
explained by the independent variables used, “No. of Screens,” “Theatres,” “No.
of Films Screened,” “Top Price of Cinema Tickets,” and “Capacity (000 seats).”

The adjusted r2 value of 0.965890255 suggests that approximately 96.59%


of “Number of Admissions” can be explained by all the aforementioned
dependent variables, while also taking into account the sample size and number
of independent variables.

Linear Equation for Multiple Regression

From the given linear regression analysis above, we can form the multiple
regression equation for the Number of Admissions in the audience demand for
cinema films:

The form of the equation will be:

Ŷ = b0 + b1X1+ b2X2 + b3X3 + b4X4+ b5X5+ b6X6

where:

Ŷ = Number of admissions (millions)


b0 = Intercept (i.e. when Y = 0)
X1 = Number of Screens
b1 = rate of increase of Number of Admissions given No. of Screens
X2 = Theatres
b2 = rate of incrase of Number of Admissions given Theatres
X3 = Number of Films Screened
B3 = rate of increase of Number of Admissions given Number of
Films Screened
X4 = Top Price for Cinema Tickets
b4 = rate of increase of Number of Admissions given Top Price for
Cinema Tickets
X5 = Capacity (‘000s)
b5 = rate of increase of Number of Admissions given Capacity.

Therefore, the final equation is as below:

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Number of admissions (millions) = 5.1391 + 0.1199(Number of Screens) +
0.0725 (Theatres) + 0.0474(Number of Films Screened) – 2.5388(Top Price for
Cinema Tickets ($)) – 0.4447(Capacity (000s))

The equation above shows by how much the Number of Admissions


increases by the following amount with an increment of 1 in each of the
dependent variables:

o 119,900 admissions for each unit increase in “Number of Screens.”


o 80,000 admissions for each unit increase in “Theatres.”
o 25,500 admissions for each unit increase in “No. of Films Screened.”
o - 7,334,100 admissions for unit increase in “Top Price of Cinema Tickets.”
o - 283 admissions for each unit increase in “Capacity.”

Significance of Dependent Variables to the Multiple Linear


Regression

The t-Test can be used to determine if there is a linear relationship


between the dependent variables considered with Y. In order to test for
significance, the null hypothesis shall be formed, which states that there is no
relationship among independent variables in determining the dependent variable,
“Number of Admissions.” In other words:

H0: b1 = b2 = b3 = b4 = b5 = 0 (no linear relationship)


H1: at least one b value above ≠ 0 (at least one independent variable
affects Ŷ)

With df = 5 (degrees of freedom) and α = 0.05, the critical value of t(α/2, 5) =


2.5706. This shows that the confidence interval is (-2.5706, 2.5706), and
therefore any t-test statistic values for the dependent variables falling outside of
this region will be rejected, proving that the dependent variable affects Ŷ. Each t-
value for each dependent variable can then be examined to see if they affect Ŷ
using this approach:

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Dependent Variable t-test Statistic Within (-2.5706, Reject H0?
2.5706)?
X1: No. of Screens 5.3155 No Yes
X2: Theatres 2.0750 Yes No
X3: No. of Films Screened 0.9650 Yes No
X4: Top Price of Cinema Yes No
Tickets -1.2406
X5: Capacity (000 seats) -4.1164 No Yes

From the above results, it can be said that one can be 95% confident that
the independent variables “No. of Screens” and “Capacity” affect the dependent
variable “Number of Admissions.” The other independent variables, “Theatres,”
“No. of Films Screened,” and “Top Price of Cinema Tickets” cannot be proven as
such to affect the dependent variable.

Conclusion: Implications of Analysis

The evident implications for film distributor executives that arise from this
analysis are the “Number of Screens” and “Capacity” of theatres; these are
significant variables when the intention of increasing the number of admissions
(and therefore profit) is involved. If executives wish to increase the number of
admissions in their theatres and increase profits, then they may first wish to
increase the number of screens and capacity of their theatres, based on the
results provided.

It should be noted, however, that even though it could not be proven with
certainty that an increase in “Theatres” and “No. of Films Screened” gave a
definite rise in admissions, it could be seen that there is a positive relationship on
average between these variables and the number of admissions. It would be of
interest to film distributor executives to also take into account this finding.
Increasing the number of theatres and number of films being screened might also
have a positive effect on admissions, albeit on a smaller scale. Of course, the

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decision of which dependent variable to leverage would no doubt depend on
business factors such as the company’s budget, among other things.

2. Other Relevant Variables


Think about some other variables, not included above, that may also be
important predictors in determining the annual numbers of movie-goers.

The given variables in the linear regression analysis may not be the most
exhaustive list of relevant variables in the equation. Other variables that may
have been important predictors in determining the annual numbers of movie-
goers include the following:

o Screening Times During the Day may be relevant because the audience may
have a particular time during the day that viewing movies is most favourable
i.e. at night, rather than in the afternoons when many people may be working.

o Screening Times During the Year is also a potentially strong indicator in this
analysis, due the fact that people may be unable to attend, or unwilling to
attend, cinemas during certain parts of the year.

o Location of Cinema could be important for the purpose of convenience for


viewers to attend. The audience members would not doubt be more willing to
travel less distance to attend a movie rather than spend a long time travelling
to the cinema to watch a particular movie.

o Certain demographic information (other than age, which is covered below)


such as Gender, Nationality, Religion or Political View of the audience may
also be prevalent factors in distinguishing movie-going trends. Someone who
is devoutly religious, for example, may be unwilling to watch movies
altogether. Similarly, women may be less willing to watch movies than men,
as another example.

o The Genre of the Film (Horror/Comedy/etc) could also be another telling


factor in the search for more relationships among variables. Horror flicks, for
example, may be more popular than say Romance or Western movies.

o Lastly, the Amount ($) Spent on Advertising for the Film may play a big part in
the reason for why admissions may increase. If one film is given a lot of
advertising, then it would be expected that it’s presence would reach more
people, and more people would therefore know about it and/or attend the
cinema to view it.

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3. Multiple Regression Model: Movies Seen

Some film distributors offer discount cinema tickets via email. Suppose that a
random sample of 25 movie-goers is undertaken, and suppose that the
number of movies the person has seen in the last year, their age and income,
and the number of discount cinema tickets they have received via email in the
last year, is recorded. Use the data to develop a multiple regression model to
predict the number of times an individual goes to the movies per year from
their age, income and number of discount cinema tickets received. Which
particular independent variables seem to have more promise in predicting the
number of times a person goes to the movies? What marketing implications
might be evident from this analysis?

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Introduction

In order to accurately perform the regression analysis and make


predictions for this model, it must be confirmed that the regression modeling is
accurate. In doing so, the following assumptions will be made:

 The dependant variable in this analysis is “No. of Movies Seen at Cinema


Last Year.”
 The independent variables in this analysis are “Age,” “No. of Emailed
Discount Cinema Tickets Received Last Year,” and “Income (‘000s).”
 Residuals in the model are normally distributed, have constant variance,
and are independent.
 We will use a confidence level for regression coefficients of 95%, such that
α = 0.05.

Results

The results for the multiple linear regression analysis are given below:

Regression Statistics
Multiple R 0.598474304
R Square 0.358171492
Adjusted R Square 0.266481705
Standard Error 3.822203471
Observations 25

ANOVA
df SS MS F Significance F
Regression 3.0000 171.2060 57.0687 3.9063 0.0231
Residual 21.0000 306.7940 14.6092
Total 24.0000 478.0000

Coefficie Standard P- Lower Upper


nts Error t Stat value 95% 95%
1.529 0.141
Intercept 5.4654 3.5728 7 0 -1.9646 12.8954
-0.534 0.598
Age -0.0521 0.0974 9 4 -0.2545 0.1504
No of discount tickets 3.230 0.004
received 1.1775 0.3645 5 0 0.4195 1.9355
0.645 0.525
Income ($000) 0.0383 0.0593 8 4 -0.0851 0.1617

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RESIDUAL OUTPUT
Observatio
n Predicted No of movies seen Residuals
1 6.1075 -2.1075
2 11.1321 0.8679
3 9.9192 0.0808
4 10.3155 -2.3155
5 14.3334 -3.3334
6 12.3506 -0.3506
7 7.5439 0.4561
8 10.3509 -4.3509
9 12.9997 3.0003
10 6.2117 3.7883
11 10.8029 7.1971
12 8.7083 3.2917
13 9.4561 -8.4561
14 7.2517 4.7483
15 12.3359 2.6641
16 5.8659 -2.8659
17 13.5710 -3.5710
18 10.0921 -2.0921
19 11.3404 3.6596
20 16.9863 2.0137
21 8.9333 3.0667
22 12.3617 1.6383
23 10.1295 -0.1295
24 9.5435 -3.5435
25 11.3570 -3.3570

Confidence and Prediction Estimate Intervals


t Statistic 2.079614
Predicted Y (YHat) 5.46538

For Average Predicted Y (YHat)


Interval Half Width 7.43
Confidence Interval Lower Limit -1.96462
Confidence Interval Upper Limit 12.89538

For Individual Response Y


Interval Half Width 10.88057
Prediction Interval Lower Limit -5.41519
Prediction Interval Upper Limit 16.34595

As mentioned previously, the given regression analysis above presents


several key statistics that are useful for further analysis. These include
regression statistics such as r2, ANOVA (analysis of variance) statistics, and
confidence interval estimates. These are discussed below in more detail.

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Coefficient of Multiple Determination: r2 and Adjusted r2

The r2 value (“r square”) of roughly 0.3582 indicates that approximately


35.82% of the variation in the dependent variable “No. of Movies Seen at Cinema
Last Year” can be explained by the independent variables used, “Age,” “No. of
Emailed Discount Cinema Tickets Received Last Year,” and “Income (‘000s).”

The adjusted r2 value of 0.2665 suggests that approximately 26.65% of


“No. of Movies Seen at Cinema Last Year” can be explained by all the
aforementioned dependent variables, while also taking into account the sample
size and number of independent variables.

Linear Equation for Multiple Regression

From the given linear regression analysis above, we can form the multiple
regression equation for the Number of Admissions in the audience demand for
cinema films:

The form of the multiple linear regression equation will be:

Ŷ = b0 + b1X1+ b2X2 + b3X3

where:

Ŷ = Number of Movies Seen at Cinema Last Year


b0 = Intercept (i.e. when Y = 0)
X1 = Age
b1 = rate of increase of No. of Movies Seen at Cinema Last Year given
Age
X2 = No. of Emailed Discount Cinema Tickets Received Last Year
b2 = rate of increase of No. of Movies Seen at Cinema Last Year given No.
of Emailed Discount Cinema Tickets Received Last Year
X3 = Income (‘000s)
b3 = rate of increase of No. of Movies Seen at Cinema Last Year given
Income (‘000s)

Therefore, the final equation is as below:

Number of Movies Seen Last Year = 5.4654 - 0.0521(Age) + 1.1775(No. of


Emailed Discount Cinema Tickets Received Last Year) + 0.0383(Income (‘000s))

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The equation above shows by how much the Number of Movies Seen Last
Year increases by the following amount with an increment of 1 in each of the
dependent variables:

o - 0.0521 movies seen last year for each unit increase in “Age”
o 1.1775 movies seen last year for each unit increase in “No. of Emailed
Discount Cinema Tickets Received Last Year.”
o 0.0383 movies seen last year for each unit increase in “Income (‘000s).”

Significance of Dependent Variables to the Multiple Linear


Regression

The t-Test can be used to determine if there is a linear relationship


between the dependent variables considered with Ŷ. In order to test for
significance, the null hypothesis shall be formed, which states that there is no
relationship among independent variables in determining the dependent variable,
“Number of Movies Seen Last Year.” In other words:

H0: b1 = b2 = b3 = b4 = b5 = 0 (no linear relationship)


H1: at least one b value above ≠ 0 (at least one independent variable
affects Ŷ)

With df = 3 (degrees of freedom) and α = 0.05, the critical value of t(α/2, 3) =


3.1824. This shows that the confidence interval is (-3.1824, 3.1824), and
therefore any t-test statistic values for the dependent variables falling outside of
this region will be rejected, proving that the dependent variable affects Ŷ. Each t-
value for each dependent variable can then be examined to see if they affect Ŷ
using this approach:

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Dependent Variable t-test Statistic Within Reject H0?
(-3.1824, 3.1824)?
X1: Age -0.5349 Yes No
X2: No. of Emailed Discount No Yes
Cinema Tickets Received Last
Year 3.2305
X3: Income (‘000s) 0.6458 Yes No

From the above results, it can be said that there is 95% confidence that
the independent variable “No. of Emailed Discount Cinema Tickets Received
Last Year” affects the dependent variable “Number of Movies Seen Last Year.”
The other independent variables, “Age” and “Income (‘000s),” can not be proven
as such to affect the dependent variables.

Conclusion: Marketing Implications of Analysis

The evident implications for marketing professionals given the above


analysis is that the number of emailed discount cinema tickets received last year
had a direct impact on the number of movies a person saw last year. If
marketers wish to increase the number of movies that people see in future (and
therefore increase profits for the companies they work for), then it would be in
their best interests to either continue emailing discount cinema tickets to
customers, or perhaps even increase the amount of such emailed tickets, based
on the results provided.

While less obvious to prove given the results of the t-Test, it should also
be taken into account the other factors of the given multiple linear equation -
“Age” and “Income.” It could be assumed that the older one gets (i.e. the higher
the “Age” value), the lower the value of movies being seen in a year becomes.
Conversely, the more a person is paid (i.e. the higher the “Income (‘000s)” value),
the higher the value of movies being seen may become, based on our results.
Both of these assumptions, while not proven statistically, certainly make sense.
Marketing representatives could use this knowledge to target both younger and
wealthier populations to try and increase the number of movies being seen in any
subsequent year as an initiative to boost company profits.

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