Consider the following to answer the question(s) below:
Consider the following scatter diagram for 24 of the top grossing movies of all time. The data include the highest grossing films for which world box office receipts and budgets were available. The top two were Avatar and Titanic.
-The best practice for modelling this data set given the scatter plot would be
A) to estimate the model both including and excluding the data for Avatar and Titanic and then to compare the two regression models to understand how they differ.
B) to include the data for Avatar and Titanic and use the model without any doubt.
C) to exclude the data for Avatar and Titanic, construct the new model and use only new one.
D) to find different data that will measure box office success and perfectly fit to the given equation.
E) to use the given regression equation and treat Avatar and Titanic as extrapolation points.

Question

Consider the following to answer the question(s) below:
Consider the following scatter diagram for 24 of the top grossing movies of all time. The data include the highest grossing films for which world box office receipts and budgets were available. The top two were Avatar and Titanic.  
-The best practice for modelling this data set given the scatter plot would be
A) to estimate the model both including and excluding the data for Avatar and Titanic and then to compare the two regression models to understand how they differ. 
B) to include the data for Avatar and Titanic and use the model without any doubt. 
C) to exclude the data for Avatar and Titanic, construct the new model and use only new one. 
D) to find different data that will measure box office success and perfectly fit to the given equation. 
E) to use the given regression equation and treat Avatar and Titanic as extrapolation points.

Quizplus · Accepted Answer

Excluding Avatar and Titanic would result in a biased model, as they are two of the highest grossing movies of all time, and their exclusion could lead to a skewed analysis. However, including them in the analysis could also have an impact on the model, as they may be outliers. Therefore, the best practice would be to estimate the model both including and excluding Avatar and Titanic, and see how they differ, in order to understand the impact of including these outliers on the model.

Consider the Following to Answer the Question(s) Below