Suppose that youve been asked by the San Diego Padres baseball team to evaluate the economic impact
Question:
Where:
ATTi = the attendance at the ith game
WINi = the winning percentage of the opponent in the ith game
FREEi = a dummy variable equal to 1 if the ith game was a promotion game at which something was given free to each fan, 0 otherwise
DAYi = a dummy variable equal to 1 if the ith game was a day game and equal to 0 if the game was a night or twilight game
WEEKi = a dummy variable equal to 1 if the ith game was during the week and equal to 0 if it was on the weekend
a. You expect the variables WIN and FREE to have positive coefficients. Create and test the appropriate hypotheses to evaluate these expectations at the 5-percent level.
b. You expect WEEK to have a negative coefficient. Create and test the appropriate hypotheses to evaluate these expectations at the 1-percent level.
c. Youve included the day game variable because your boss thinks its important, but youre not sure about the impact of day games on attendance. Run a two-sided t-test around zero to test these expectations at the 5-percent level.
d. What problems appear to exist in your equation?
e. Which of the problems that you outlined in part d is the most worrisome? Explain your answer.
f. What explanation or solution can you think of for this problem?
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