Question

The owner of a movie theater company used multiple regression analysis to predict gross revenue (y)

as a function of television advertising (x₁) and newspaper advertising (x₂). The estimated regression equation was

ŷ = 82.5 + 2.26x₁ + 1.30x₂.

The computer solution, based on a sample of eight weeks, provided SST = 25.3 and SSR = 23.415.

(a)Compute and interpret R² and R_a². (Round your answers to three decimal places.)

The proportion of the variability in the dependent variable that can be explained by the estimated multiple regression equation is___________. Adjusting for the number of independent variables in the model, the proportion of the variability in the dependent variable that can be explained by the estimated multiple regression equation is __________.

(b)When television advertising was the only independent variable, R² = 0.653 and R_a² = 0.595. Do you prefer the multiple regression results? Explain.

Multiple regression analysis (is/is not preferred) since both R² and R_a² show (an increased /a decreased) percentage of the variability of y explained when both independent variables are used.

Answer 1