12.54 John Swanson, president of Market Research Inc., has asked you to estimate the coefficients of the model Y- Bo+ B,X, + BX; + B,Xy where Y is the expected sales of office supplies for a large retail distributor of office supplies, X¡ is the total disposable income of residents within 5 miles of the store, and X, is the total number of persons employed in information-based busi- nesses within 5 miles of the store. Recent work by a national consulting firm has concluded that the coefficients in the model must have the following restriction:

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12.54 John Swanson, president of Market Research Inc.,
has asked you to estimate the coefficients of the
model
Y = Bo + B,X, + BX + BaXy
where Y is the expected sales of office supplies for
a large retail distributor of office supplies, X¡ is
the total disposable income of residents within
5 miles of the store, and X, is the total number
of persons employed in information-based busi-
nesses within 5 miles of the store. Recent work by
a national consulting firm has concluded that the
coefficients in the model must have the following
restriction:
Bi+ B - 2
Describe how you would estimate the model coeffi-
cients using least squares.
Transcribed Image Text:12.54 John Swanson, president of Market Research Inc., has asked you to estimate the coefficients of the model Y = Bo + B,X, + BX + BaXy where Y is the expected sales of office supplies for a large retail distributor of office supplies, X¡ is the total disposable income of residents within 5 miles of the store, and X, is the total number of persons employed in information-based busi- nesses within 5 miles of the store. Recent work by a national consulting firm has concluded that the coefficients in the model must have the following restriction: Bi+ B - 2 Describe how you would estimate the model coeffi- cients using least squares.
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