ANONYMOUSLY MARKED
School of Economics
ASSIGNMENT
Semester 1 - 2025
ECMT1010 Introduction to Economic Statistics
Due 11:59PM Sunday 25 May 2025
Instructions
i. Review ‘Late submission’ and ‘Academic integrity’ in the ECMT1010 unit outline.
ii. Enter your answers using the Word template.
iii. Save your answers as a PDF file named after your 9-digit Student ID (SID), e.g.,
567891234.PDF. Do not include your name or a cover sheet.
iv. Submit the PDF of your answers under ‘Assignment’ on Canvas. Work submitted
after 11.59PM Sunday 25 May 2025 is subject to a penalty of 5% per calendar day
late. Work submitted after 11.59PM Wednesday 4 June 2025 will receive a mark of
0.
v. Use your assigned data set (see below). Enter your data set number using the box
provided in the Word template. Use of the wrong data set may be reported to the
Educational Integrity Coordinator, Faculty of Arts and Social Sciences. Use of the
wrong data set will result in low marks (because most of your answers will be wrong).
vi. There are 10 questions worth 2 marks each for a maximum of 20 marks. Answer
all questions. The assignment is anonymously graded (provided you don’t put your
name on it).
vii. Show numerical answers to 3 decimal places. Carry out all tests at a 5% level of
significance.
viii. When communicating statistical results, it is important to be accurate and concise.
Keep your comments, conclusions, comparisons, etc., to one or two sentences. Ex-
cessively long responses indicate a lack of understanding and will be penalised ac-
cordingly.
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Aim: The assignment illustrates the use of various statistical methods and software (e.g.,
Excel, StatKey) to analyze economic data.
Data description: Your assigned data set is extracted from the Hollywood Movies dataset in
the 3rd edition of the Lock et al. textbook. It consists of the movie name, Rotten Tomatoes
score, budget, and world gross (the latter two in millions of US dollars) from a randomly-
selected sample of 101 movies released between 2012 and 2018.
• You must use the data set assigned to you, which is determined by the last digit of
your Student ID (SID). For example, if your SID is 567891234, you must use the
dataset Movies4.csv.
• The first row contains the variable names; the remaining rows contain themovie data.
The Movie column contains the name of the film, RottenTomatoes is the percentage
of critical reviews that are more positive than negative on the review aggregation
website of the same name, Budget is the production cost of the movie (in millions of
US dollars), and WorldGross is the cinema ticket revenue generated by the movie (in
millions of US dollars).
QUESTIONS
1. Are there any outliers for WorldGross? Explain your steps and describe your findings.
[2 marks]
2. Produce a scatter plot of WorldGross against Budget. Compute the correlation. Com-
ment on the association between the two variables. [2 marks]
3. Use your sample to bootstrap a 95% confidence interval for the correlation between
WorldGross and Budget. What is the interpretation of the confidence interval? [2
marks]
4. Suppose youwant to test the proposition thatmovie audiences (asmeasured by WorldGross)
respond to media hype (as measured by Budget). Define your notation and write down
the null and alternative hypotheses to test the proposition. Carry out the hypothesis test
using your confidence interval from above. Does the evidence support the proposition
that audiences respond to media hype? [2 marks]
5. Another question is whether big-budget movies receive more favourable critical reviews.
Define your notation and write down the null and alternative hypotheses to test the
proposition. [2 marks]
6. Carry out the hypothesis test using approximation. Justify your approximation, show
your test statistic, and p-value. Does the evidence support the proposition that big-
budget movies receive more favourable critical reviews? [2 marks]
7. You are also interested in whether reviews by movie critics can be used to predict movie
ticket revenue. Define your notation and write down the population regression model
to make such a prediction. [2 marks]
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8. Estimate the regression model and report your results. Interpret the estimate of the
regression intercept. [2 marks]
9. Test whether the independent variable is an effective predictor in the estimated regres-
sion model. Show your null and alternative hypotheses, the test statistic, decision rule,
and conclusion to the test. [2 marks]
10. Use the model to predict the ticket revenue for a film with a Rotten Tomatoes score of
99. How confident are you in this prediction? Briefly explain your reasoning. [2 marks]
Due 11:59PM Sunday 25 May 2025
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