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    Regression analysis problem

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    A security analyst specializing in the stocks of the motion picture industry wishes to examine the relation between the number of movie theater tickets sold in December and the annual level of earnings in the motion picture industry. Data for the last 15 years are used to estimate the regression model. E is the total earnings of the motion picture industry measured in dollars per year and N is the number of tickets sold in December. The regression output is as follows [T scores are in ( )]:

    E = 25042000.0 + 32.31N R2 = 0.8311
    (1.24) (3.78)

    a. Fully Evaluate and interpret these empirical results on the basis of the available statistics (use a 0.05 significance level).
    b. Critically evaluate the model.

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    Solution Summary

    Step by step method for computing regression analysis is given in the answer