statsps6 - why people go to the movies is to eat pop corn....

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Problem Set 6 Probability and Statistics Bernardo Guimaraes September 2009 1. My father-in-law, a quite opinionated character, believes that drinking beer increases the will- ingness to have an ice cream, so people consume more ice cream if they had one or more beers before. My brother-in-law decided to test this theory. He collected daily data on consumption of beer ( C beer ) and consumption of ice cream ( C ice ) at Ipanema beach (Rio de Janeiro, Brazil) for one year. With such 365 data points, he ran the following regression: C ice = + ±:C beer + " t father-in-law is right: the more beer you drink, the more ice cream you want to have. What is going on? Is my father-in-law indeed probably right? Or is there any problem in the regression? 2. My mother-in-law also produces interesting theories. One of them is that the main reason for
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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.

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