Do movies of different types have different rates of return on their budgets? Here is a regression of US Gross ($M) on Budget ($M) and with an indicator variable Comedy that is 1 for comedies and 0 for adventure films.
Dependent variable is: US Gross ($M)
variable | Coefficient | SE(Coeff) | t-ratio | P-value | R-squared = 41.8% |
Constant | -13.9288 | 30.51 | -0.457 | 0.6497 | R-squared (adjusted) = 37.0% |
Budget ($M) | 1.43487 | 0.3967 | 3.62 | 0.0007 | s = 57.94 |
Budget*Comedy | -0.616027 | The 0.4009 | -1.54 | 0.1300 | 49 degrees of freedom |
Comedy | 34.1453 | 33.15 | 1.03 | 0.3081 |
i) Interpret the coefficient of Comedy.
ii) Interpret the coefficient of Budget * Comedy
iii) Is the interaction effect of Budget and Comedy significant?
Use α = 0.05. Explain.
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