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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 Street 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, it 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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This note was uploaded on 02/28/2010 for the course ECO 211 taught by Professor Gilo during the Spring '10 term at Young Harris.
- Spring '10