Unformatted text preview: why people go to the movies is to eat pop corn. She thinks that movie theaters should estimulate the sales of pop corn, perhaps lowering its price, because that would attract many people to the cinema. My brave brother-in-law decided to test this theory. He collected daily data on consumption of pop corn ( C pop ) and sales of movie tickets ( C tkts ) at the ±Screen on Baker Street² for one year. With such 365 data points, he ran the following regression: C tkts = & + ±:C pop + " t Interestingly, again, he found a positive and very signi&cant coe¢ cient. So he concluded that my mother-in-law is right: if the movie theather stimulates the sales of pop corn, it³ ll sell more tickets. What is going on? Is my mother-in-law indeed probably right? Or is there any problem in his regression? 1...
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- Spring '10
- Rio de Janeiro, ice cream, Bernardo Guimaraes, pop corn, Ipanema beach