Question

In 2018, 14.77 million people attended a Broadway show, paying an average of more than $120...

In 2018, 14.77 million people attended a Broadway show, paying an average of more than $120 per ticket. So what variables are related to the success of a particular Broadway season? Data from the Broadway League, Inc. (www.broadwayleague.com/research/statistics-broadway-nyc/) are used to estimate the following multiple linear regression model:

Grossi=β0+β1Attendancei+β2PlayingWeeksi+β3NewProductionsi+εi

for i=1,⋯,35 . The following data are gathered for each season from 1984 to 2018:

  • Gross: Gross earnings ($Millions)[JP1]
  • Attendance: measured in millions[JP2]
  • PlayingWeeks: Total weeks during each show performed summed over all shows; the best measure of Broadway’s overall activity
  • NewProductions: The number of new productions during

Excel was used to estimate this model and the output is provided below.

Regression Statistics

Multiple R

0.922185639

R Square

0.850426354

Adjusted R Square

0.835951485

Standard Error

183.1940204

Observations

35

ANOVA

df

SS

MS

F

Significance F

Regression

3

5915152.02

1971717

58.75192

6.84E-13

Residual

31

1040361.523

33560.05

Total

34

6955513.543

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

-1345.794142

340.4476833

-3.95301

0.000416

-2040.14

-651.447

Attendance

258.0733774

66.98749021

3.852561

0.000549

121.4515

394.6953

Playing weeks

-0.831807119

0.639068006

-1.30159

0.202645

-2.13519

0.471581

New Productions

12.64582072

7.912639627

1.59818

0.120147

-3.49211

28.78376

[JP1]Beginning with the 2009-10 season, "Gross" represents gross gross—which is the gross earnings before deductions. For prior seasons, “Gross” represents net gross earnings, which is the income after accounting for deductions incurred by the show.

[JP2]Note: before 2009 this is paid attendance, beginning in 2009 it is attendance

  1. Interpret the estimated coefficient for PlayingWeeks. Does this make sense?
  1. At the 5% level of significance, test the significance of the variable PlayingWeeks. What do you conclude?

Homework Answers

Answer #1

from above output;

estimated coefficient for Playing weeks= -0.831807119

We may interpret the slope −0.831807119 as there is decrease in Gross earnings due to PlayingWeeks.

Now to test significance of slope of playing weeks

H0: β1 = 0    v/s     H1: β1 ≠0

P-value= 0.202645

α=0.05

p-value > 0.05

hence we accept null hypothesis at 5% level of significance.

conclusion: Failing to reject H 0 , implies that there is no linear relationship between Gross earnings and PlayingWeeks

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