Professor William Greene Stern School of Business IOMS Department Department of Economics Regression and Forecasting Models Part 0 Introduction Professor William Greene Economics and IOMS Departments ID: 571963
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Slide1
Regression and Forecasting Models
Professor William GreeneStern School of BusinessIOMS Department Department of EconomicsSlide2
Regression and Forecasting Models
Part 0 - IntroductionSlide3
Professor William Greene; Economics and IOMS Departments
Office: KMEC, 7-90 (Economics Department)
Office phone: 212-998-0876
Email: wgreene@stern.nyu.edu
URL: http
://people.stern.nyu.edu/wgreene
http
://people.stern.nyu.edu/wgreene/regression/Outline.htmSlide4
Course Objectives
Basic understanding: The regression model as a framework for the analysis of relationships among variables
Technical know how
: How to formulate a regression model, estimate its parameters, and understand the implications of the estimated model.Slide5
We used McDonald’s Per CapitaSlide6
Macs and Movies
Countries and Some of the DataCode Pop(mm) per cap # of Language
Income McDonalds
1 Argentina 37 12090 173 Spanish
2 Chile, 15 9110 70 Spanish
3 Spain 39 19180 300 Spanish
4 Mexico 98 8810 270 Spanish
5 Germany 82 25010 1152 German
6 Austria 8 26310 159 German
7 Australia 19 25370 680 English
8 UK 60 23550 1152 UK
Genres (MPAA)
1=Drama
2=Romance
3=Comedy
4=Action
5=Fantasy
6=Adventure
7=Family
8=Animated
9=Thriller
10=Mystery
11=Science Fiction
12=Horror
13=CrimeSlide7
Movie GenresSlide8
Movie Madness Data (n=2198)Slide9Slide10
Case Study Using A Regression Model: A Huge Sports Contract
Alex Rodriguez hired by the Texas Rangers for something like $25 million per year in 2000.Costs – the salary plus and minus some fine tuning of the numbers
Benefits – more fans in the stands.
How to determine if the benefits exceed the costs? Use a regression model.Slide11
Baseball Data (Panel Data – 31 Teams, 17 Years)Slide12
A Regression Model
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= .54914
1
= 11093.7
2
= 2201.2
3
= 14593.5Slide14
Marginal Value of an A Rod
8 games * 32,757 fans + 1 All Star = 35957 = 298,016 new fans298,016 new fans *
$18 per ticket
$2.50 parking etc.
$1.80 stuff (hats, bobble head dolls,…)
$6.67 Million per year !!!!!
It’s not close.
(Marginal cost is at least $16.5M / year)Slide15
Course Prerequisites
Basic algebra. (Especially summation)Geometry (straight lines)Logs and
exponents
NOTE
: I (you) will use only base e (natural) logs, not base 10 (common) logs in this course.
Previous course in basic statistics – up to testing a hypothesis about a mean
Slide16
Course Materials
Notes: Distributed in first classText: McClave, Benson, Sincich; Statistics for Business and Economics (2
nd
Custom NYU edition), Pearson, 2011.
On
the course website:
Class
slide presentations
Problem
setsData sets for exercises
http://people.stern.nyu.edu/wgreene/regression/Outline.htmSlide17
Course Software: Minitab
The Current Version: Minitab 16
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