Question 11.84

11.84 Alternate movie revenue model.

CASE 11.2 Refer to the data set on movie revenue in Case 11.2 (page 550). The variables Budget, Opening, and USRevenue all have distributions with long tails. For this problem, let’s consider building a model using the logarithm transformation of these variables.

movies

  1. Run the multiple regression to predict the logarithm of USRevenue using the logarithm of Budget, the logarithm of Opening, and Theaters, and obtain the residuals. Examine the residuals graphically. Does the distribution appear approximately Normal? Explain your answer.
  2. State the regression equation and note which coefficients are statistically significant at the 5% level.
  3. In Exercise 11.37 (page 555), you were asked to predict the revenue of a particular movie. Using the results from this new model, construct a 95% prediction interval for the movie’s log USRevenue.
  4. The movie The Hangover has the largest residual. Remove this movie and refit the model in part (a). Compare these results with the results in part (b). Does it appear this case is an influential observation? Explain your answer.