Question 11.83

11.83 Effect of an outlier.

CASE 11.2 In Exercise 11.50 (page 563), we identified a movie that had much higher revenue than predicted. Remove this movie and repeat the previous exercise. Does the removal of this movie change which model you prefer?

movies

11.83

			Regression Coefficients
# variables	-Square		Intercept	Opening	Budget	Theaters	Sequel
1	0.716	41.368	18.04207	2.4782*	0	0	0
2	0.7785	36.997	6.14917	2.14815*	0.34102*	0	0
2	0.7486	39.414	21.26068	2.65651*	0	0	−31.97239*
2	0.7434	39.821	−55.80153	2.09021*	0	0.02787*	0
3	0.7919	36.334	9.88794	2.31116*	0.29527*	0	−21.28865
3	0.7831	37.092	−61.61398	2.23857*	0	0.03141*	−35.44187*
3	0.7821	37.176	−22.31507	2.03073*	0.30005*	0.01128	0
4	0.8008	36.026	−35.76104	2.15636*	0.21796	0.01843	−26.12162

Five models have all terms significant: Opening alone, with Budget, with Sequel, with Theaters, or with Theaters and Sequel. Clearly, the model with both Theaters and Sequel is better than those with just Sequel or just Theaters. Likewise the models with 2 variables are better than just Opening alone. Which leaves two potentially good models: Opening with Budget or Opening with Theaters and Sequel. Both have very similar and values, so arguments for either model could be made.