EXAMPLE 11.16 Do Budget and Opening-Weekend Theater Count Add Predictive Ability?
movies
CASE 11.2 In the multiple regression analysis using all three explanatory variables, opening-weekend revenue (Opening) appears to be the most helpful (given the other two explanatory variables are in the model). A question we might ask is
The same question in another form is
The first regression run includes explanatory variables: Opening, Budget, and Theaters. The for this model is .
Now remove the variables Budget and Theaters and redo the regression with just Opening as the explanatory variable. For this model we get .
The test statistic is
The degrees of freedom are and .
The closest entry in Table E has 2 and 30 degrees of freedom. For this distribution we would need or larger for significance at the 5% level. Thus, . Software gives . Budget and theater count do not contribute significantly to explaining U.S. box office revenue when opening weekend revenue is already in the model.