. Run a multiple regression where the dependent variable is ratings and the inde

Question

. Run a multiple regression where the dependent variable is ratings and the independent variables are star and fact. Use data from CBC only. CBC Management has several questions: a. Which has more impact on a movie’s rating: Being fact-based or having one star? How much does each of these factors change the ratings? b. How well does this regression analysis explain the ratings? Justify your answers referring to the relevant figures. c. Are either, both, or neither of the independent variables significantly related to the ratings at 95% confidence? Justify your answers referring to the relevant figures.

Explanation / Answer

We paste the data in Excel and then carry out the required regression analysis. Given, level of significance = 0.05.
The regression model that we fit using the data in Excel is -> rating = 13.06 + (1.57*fact) + (0.70*star).
The regression output is as given below.

Now, we answer the questions.
(a) Being fact-based has more impact on a movie's ratings. This is evident from its regression coefficient value.
If a movie is fact based, then its ratings increases by 1.57 and if the movie has 1 star, then its ratings increases by 0.69.

(b) This regression analysis does not explain the ratings quite well because of the R squared value of 0.11 which is very low. This means that only 11% of the variability in the ratings variable can be explained by this linear regression model.

(c) Only the fact variable is significantly related to the ratings variable and not the stars variable. Fact variable has a p-value less than 0.05, which makes it statistically relevant and the stars variable has a p-value greater than 0.05, which makes it statistically not relevant.

SUMMARY OUTPUT Regression Statistics Multiple R 0.334245497 R Square 0.111720052 Adjusted R Square 0.090819348 Standard Error 2.161863289 Observations 88 ANOVA df SS MS F Significance F Regression 2 49.96393699 24.98196849 5.345276839 0.006506823 Residual 85 397.2604948 4.67365288 Total 87 447.2244318 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 13.06447563 0.385259292 33.91086443 3.60019E-51 12.29847696 13.8304743 12.29847696 13.8304743 Fact 1.569276219 0.48979156 3.203967458 0.001909021 0.595439398 2.543113039 0.595439398 2.543113039 Stars 0.698116691 0.449362501 1.553571316 0.124002332 -0.19533633 1.591569713 -0.19533633 1.591569713

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