Consider the following regression model,log(CON)=Bo + B,INC + B2INC2 + B3PRICE + uWhere CON = Household consumption expenditureINC = Household incomeINC? = Household income squaredPRICE = General price levelRegression Estimates- Dependent variable: log(CON)VariablesCoefficient Estimates and (Standard Errors)Equation 1Equation 21.2136(0.1961)Constant1.5731(0.0849)INC0.0029(0.001)INC?0.0013(0.00051)PRICE-0.0081-0.0095(0.0035)(0.0017)N (Number ofObservations)SSR (Sum of SquaredResiduals)R2500500145.63184.090.520.45You wanted to test whether income has significant effect on household consumption. Which of thefollowing represents the approximate critical value for this test at 1% level of significance?Critical value of F with 1% level of significance and 3 and 496 df is: F = 2.60Critical value of t with 1% level of significance and 2 and 498 df is: F = 2.326Critical value of F with 1% level of significance and 2 and 496 df is: F = 4.61Critical value of t with 1% level of significance and 496 df: t = 2.576

Given Information: The regression model is: logCON=β0+β1 INC+β2 INC2+β3 PRICE+u. Number of…

Answered: Consider the following regression…

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter6: Exponential And Logarithmic Functions

Section6.8: Fitting Exponential Models To Data

Problem 1TI: Table 2 shows a recent graduate’s credit card balance each month after graduation. a. Use...

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Consider an estimated regression explaining the salaries of CEOS(in millions of dollars) in terms of annual firm sales (in millions of dollars), return on equity (roe in percentage form), and return on fırm's stock (ros, in percentage form) : log(salary) = 4.32 + 0.018sales + 0.0174roe + 0.00024ros How would you interpret the estimated coefficient of sales ? When sales increase by 1 million dollars, CEOS' salary is expected to increase by 0.018%. When sales increase by 1 million dollars, CEOS' salary is expected to increase by 1.8%. When sales increase by 1%, CEOS' salary is expected to increase 0.18%. When sales increase by 100%, CEOS' salary is expected to increase 0.18%.
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