In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports the following least squares regression results for a cross section study of the effect of age composition on savings in 74 countries in 1964: log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2 (R2 = 0.57) log S/N = 8.7851 + 1.1486 log Y/N + 0.0265 log G - 1.3438 log D1 - 0.3966 log D2 (R2 = 0.96) where S/Y = domestic savings ratio, S/N = per capita savings, Y/N = per capita income, D1 = percentage of the population under 15, D2 = percentage of the population over 64, and G = growth rate of per capita income. Are these results correct? Explain..
In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports the following least squares regression results for a cross section study of the effect of age composition on savings in 74 countries in 1964: log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2 (R2 = 0.57) log S/N = 8.7851 + 1.1486 log Y/N + 0.0265 log G - 1.3438 log D1 - 0.3966 log D2 (R2 = 0.96) where S/Y = domestic savings ratio, S/N = per capita savings, Y/N = per capita income, D1 = percentage of the population under 15, D2 = percentage of the population over 64, and G = growth rate of per capita income. Are these results correct? Explain..
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In the December, 1969, American Economic Review (pp. 886-896), Nathanial Leff reports the
following least squares regression results for a cross section study of the effect of age composition on
savings in 74 countries in 1964:
log S/Y = 7.3439 + 0.1596 log Y/N + 0.0254 log G - 1.3520 log D1 - 0.3990 log D2 (R2
= 0.57)
log S/N = 8.7851 + 1.1486 log Y/N + 0.0265 log G - 1.3438 log D1 - 0.3966 log D2 (R2
= 0.96)
where S/Y = domestic savings ratio, S/N = per capita savings, Y/N = per capita income, D1 = percentage of
the population under 15, D2 = percentage of the population over 64, and G = growth rate of per capita
income. Are these results correct? Explain..
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