The Management of a Professional Baseball Team Is in the Process

question 200

Essay

The management of a professional baseball team is in the process of determining the budget for next year.A major component of future revenue is attendance at the home games.In order to predict attendance at home games,the team's statistician has used a multiple regression model with dummy variables.The model is of the form: y = β₀+ β₁x₁+ β₂x₂+ β₃x₃+ ε where:
Y = attendance at a home game
x1= current power rating of the team on a scale from 0 to 100 before the game.
x2and x3are dummy variables,and they are defined below.
x2= 1,if weekend
x2= 0,otherwise
x3= 1,if weather is favourable
x3= 0,otherwise
After collecting the data based on 30 games from last year and implementing the above stated multiple regression model,the team statistician obtained the following least squares multiple regression equation: $$\hat { y } = - 1050 + 250 x _ { 1 } + 2200 x _ { 2 } + 5400 x _ { 3 }$$ The multiple regression compute output also indicated the following: $$s _ { b _ { 1 } } = 800 , s _ { b _ { 2 } } = 1000 , s _ { b _ { 3 } } = 1850$$
-Interpret the estimated model coefficient b2.

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Definitions:

Consolidated Statements

Financial reports that combine the accounting information of a parent company with its subsidiaries.

Stock Investments

Financial assets representing ownership stakes in companies, which are bought and sold on stock exchanges, and can offer dividends and capital gains to investors.

Equity Method

The Equity Method is an accounting approach used for recording investments in associate companies where the investor has significant influence, typically 20-50% ownership, by recognizing its share of the associate's profits or losses.

Dividend Revenue

Income received from owning shares of stock in a corporation that pays dividends.