I need help with c (c) Estimation output is presented in Figure 4 below. Interpret the marginal effect ofvariable "Food".Figure 4: Estimation outputCall:1m(formula = `Case-Shiller Housing Price Index`~ Food, data = x)Residuals:Min1Q Median3Q Max-29.238 -9.943 -2.793 12.282 28.424Coefficients:Estimate Std. Error t value(Intercept) -150.08593001 6.35598100 -23.61 <0.0000000000000002 ***Food0.00174447 0.00003906 44.66 <0.0000000000000002 ***Signif. codes: 0*** 0.001*** 0.01 * 0.05 '.' 0.1'' 1Residual standard error: 13.98 on 308 degrees of freedomMultiple R-squared: 0.8662, Adjusted R-squared: 0.8658F-statistic: 1994 on 1 and 308 DF, p-value: < 0.00000000000000022Pr(>ltl)

Answered: c) Estimation output is presented in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I need help with c

(c) Estimation output is presented in Figure 4 below. Interpret the marginal effect of
variable "Food".
Figure 4: Estimation output
Call:
1m(formula = `Case-Shiller Housing Price Index`~ Food, data = x)
Residuals:
Min
1Q Median
3Q Max
-29.238 -9.943 -2.793 12.282 28.424
Coefficients:
Estimate Std. Error t value
(Intercept) -150.08593001 6.35598100 -23.61 <0.0000000000000002 ***
Food
0.00174447 0.00003906 44.66 <0.0000000000000002 ***
Signif. codes: 0*** 0.001*** 0.01 * 0.05 '.' 0.1'' 1
Residual standard error: 13.98 on 308 degrees of freedom
Multiple R-squared: 0.8662, Adjusted R-squared: 0.8658
F-statistic: 1994 on 1 and 308 DF, p-value: < 0.00000000000000022
Pr(>ltl)

Expert Solution

Step 1

The marginal effect gives us an effect on the probability. In the probability scale, all effects are non-linear because conditional on covariate values, the probability must be bounded between 0 and 1.

Here we are interested to know the effect of Food on the Case- Shiller Housing Price Index.

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