2. Suppose that QED, Inc. estimates weekly demand for good X, Qx, and obtains the parameter estimates below from a multiple regression using the double-log model: Px Py Pz I Intercept 3.402 Coefficients -2.2 1.8 -0.55 -0.8 t-statistics 4.12 2.73 2.09 -7.54 where Px = price of good X, Py = price of good Y, Pz = price of good Z, and I = monthly per capita personal income. Also, multiple R² = 0.86, n = 20, and F-statistic = 17.08. a) Using the above results, construct (write out) the estimated regression equation (i) in the double log form, and, (ii) in the power or multiplicative function form. b) Interpret and explain the coefficients of Py, P₂, and I. c) Assuming a 5% significance level (k = 0.05), determine the degrees of freedom and the critical t-value. Perform t-tests on the parameter estimates for Py and P₂. Clearly and explicitly state the hypotheses for each parameter that you are testing. d) Assuming a 5% significance level (k = 0.05), perform an F-test on the entire regression. Clearly and explicitly state the hypothesis that you are testing. e) Explain the meaning of the multiple R². Briefly discuss the robustness of the estimated model, i.e., how "good" is it?
2. Suppose that QED, Inc. estimates weekly demand for good X, Qx, and obtains the parameter estimates below from a multiple regression using the double-log model: Px Py Pz I Intercept 3.402 Coefficients -2.2 1.8 -0.55 -0.8 t-statistics 4.12 2.73 2.09 -7.54 where Px = price of good X, Py = price of good Y, Pz = price of good Z, and I = monthly per capita personal income. Also, multiple R² = 0.86, n = 20, and F-statistic = 17.08. a) Using the above results, construct (write out) the estimated regression equation (i) in the double log form, and, (ii) in the power or multiplicative function form. b) Interpret and explain the coefficients of Py, P₂, and I. c) Assuming a 5% significance level (k = 0.05), determine the degrees of freedom and the critical t-value. Perform t-tests on the parameter estimates for Py and P₂. Clearly and explicitly state the hypotheses for each parameter that you are testing. d) Assuming a 5% significance level (k = 0.05), perform an F-test on the entire regression. Clearly and explicitly state the hypothesis that you are testing. e) Explain the meaning of the multiple R². Briefly discuss the robustness of the estimated model, i.e., how "good" is it?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Need help with this question ASAP please
Transcribed Image Text:2. Suppose that QED, Inc. estimates weekly demand for good X, Qx, and obtains the parameter
estimates below from a multiple regression using the double-log model:
Px
Py
Pz
Intercept
3.402
Coefficients
-2.2
1.8
- 0.55
-0.8
t-statistics
4.12
2.73
2.09
- 7.54
where Px = price of good X, Py = price of good Y, P₂ = price of good Z, and I = monthly per capita
personal income. Also, multiple R² = 0.86, n = 20, and F-statistic = 17.08.
a) Using the above results, construct (write out) the estimated regression equation (i) in the
double log form, and, (ii) in the power or multiplicative function form.
b) Interpret and explain the coefficients of Py, P₂, and I.
c)
Assuming a 5% significance level (k = 0.05), determine the degrees of freedom and the
critical t-value. Perform t-tests on the parameter estimates for Py and P₂. Clearly and
explicitly state the hypotheses for each parameter that you are testing.
d) Assuming a 5% significance level (k = 0.05), perform an F-test on the entire regression.
Clearly and explicitly state the hypothesis that you are testing.
e) Explain the meaning of the multiple R². Briefly discuss the robustness of the estimated model,
i.e., how "good" is it?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
Recommended textbooks for you
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman