Assume you want to estimate a model of Canadian exports of oil (Xoil; in barrels), and you have the price of oil (Poil; in $ per barrel), but a demand indicator (Demand;) is not available. Xoil; = Bo + B1 Poil; + B2 Demand; + uj Suggest a proxy variable to replace Demand, and explain the reasoning behind your choice.

Assume you want to estimate a model of Canadian exports of oil (Xoil; in barrels), and you have the price of oil (Poil; in $ per barrel), but a demand indicator (Demand;) is not available. Xoil; = Bo + B1 Poil; + B2 Demand; + uj Suggest a proxy variable to replace Demand, and explain the reasoning behind your choice.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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