The Maple Creek Amphitheater is an outdoor pavilion that presents musical performers throughout a six-month season, from late spring to early fall. Maple Creek presents a diverse venue of artists in a set of approximately 40 events each season. In order to better project its costs and expected attendance, Maple Creek uses regression analysis to project expected ticket sales for upcoming events for each performer. The regression results shown below are derived from the three most recent seasons. The dependent variable for Maple Creek is the number of paying ticket-holders for each event, and the five independent variables are:
1. Whether or not this particular performer appeared at Maple Creek previously (a dummy variable, 0 if no and 1 if yes).
2. The spending on advertising targeted to the performer's appearance.
3. The performer's local sales of CDs in the most recent year prior to his or her appearance.
4. The number of television appearances for the performer in the most recent year.
5. The number of public performances in the United States by the performer in the recent year.
Independent Variables Results
Regression intercept...................................................1,224
Attendance at prior concert
Coefficient............................................................. 3,445
t-value .................................................................... 4.11
Spending on advertising
Coefficient...............................................................0.113
t-value..................................................................... 1.88
Performer's CD sales
Coefficient............................................................0.00044
t-value.................................................................... 1.22
Television appearances
Coefficient................................................................. 898
t-value...................................................................... 2.4
Other public performances
Coefficient..............................................................1,233
t-value......................................................................1.3
R-squared................................................................0.58
Standard error of the estimate..................................... ..8,335
Required
1. Using the preceding regression, what attendance would be predicted for a performer who had appeared at Maple Creek previously, had six other public performances but no TV appearances, had local CD sales of $10 million, and for whom Maple Creek planned to spend $35,000 on advertising?
2. Evaluate the precision and reliability of the regression results shown earlier. What changes, if any, do you propose for the regression? Which variables should be deleted and which do you think should be added? Why?