Colonial Broadcasting Company

Analysis of the case: “Colonial Broadcasting Company.”

1. Regression Equation from the data is RATING = 13.36 – 0.6483*BBS + 1.397 *ABN
Rating for the respective network is obtained by substituting the values in the above equation as follows

Rating for
ABN
BBS
CBC
Value to be substituted for
ABN
1
0
0

BBS
0
1
0

a. Rank the networks in terms of average ratings for TV movies during 1992:

Rating for ABN = 13.36 – 0.6483*0 + 1.397 *1 = 14.757 Rating for BBS= 13.36 – 0.6483*1 + 1.397 *0 = 12.7117
Rating for CBC=13.36 – 0.6483*0 + 1.397 *0 = 13.36
From the above values
Rank as per Average Rating
Network
1
ABN
2
CBC
3
BBS

b. On average, how much higher are the ratings for the leading network than the ratings for the second-highest network?

On average, the ratings for the leading network ABN minus that of the second highest network CBC = 14.757-13.36 = 1.397 Note: The rating for BBS has a low statistical significance with a p value of 0.37

2. Regression Equation from the data is
RATING = 13.25 + 1.401 *FACT
Rating for fact based, and fictional movies are obtained by substituting the values as follows

Rating for
FACT
FICTIONAL
Value to be substituted for
FACT
1
0

a. In 1992, what were the average ratings for fact-based movies?
In 1992, Average rating for fact based movies = 13.25 + 1.401 *1 = 14.651
b. In 1992, what were the average ratings for fictional movies?
In 1992, Average rating for fictional movies = 13.25 + 1.401 *0 = 13.25

3. Consider Regression 2. Is the difference between the ratings for fact-based and fictional movies statistically significant? Explain.

The hypothesis for the regression 2 is
Null Hypothesis: H0:β1=0
Alternate Hypothesis: β1≠0
Where β1 is the coefficient of determination for FACT and β1 explains the difference between ratings for fact based and fictional movies.
“t” value of the regression coefficient FACT = 2.6 tcritical for 95% confidence level and degree of freedom 86
= T.INV.2T(0.05,86)=1.987934