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In the multiple regression equation: Y=a+B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B₁-B2 and B3 = 1

In the multiple regression equation: Y=a+B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B₁-B2 and B3 = 1

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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b. i. In the multiple regression equation: Q=-69.631-1.287 Pc + 1.950 Y₁+2.645 Pst + 1.464 T F 2020.8 R² (adj) - 0.997 N = 25 DW = 1.478 where Q is quantity demanded of gari, t denotes time period, Pc is the price of gari. Y is household disposable income, Ps is the price of maize and T is a trend term. N denotes sample size. The estimated variance-covariance matrix of the parameters of the model is given by Pc Y Ps T II. Y=a + B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B1-B2 and 33=1 A researcher estimated a demand equation for gari and obtained the following results: C Pe Y Ps T C 192.5 -5.21 2.11 -7.91 0.18 0.35 8.98 -3.01 -0.33 6.64 1.35 -0.02 -0.6 -0.12 0.02 Compute the estimated t-statistics. Carefully examine whether the estimated 1-statistics are significant at the 5 percent level. Interpret fully the results of the model. Suggest any policy implications of the estimated model.
Transcribed Image Text:b. i. In the multiple regression equation: Q=-69.631-1.287 Pc + 1.950 Y₁+2.645 Pst + 1.464 T F 2020.8 R² (adj) - 0.997 N = 25 DW = 1.478 where Q is quantity demanded of gari, t denotes time period, Pc is the price of gari. Y is household disposable income, Ps is the price of maize and T is a trend term. N denotes sample size. The estimated variance-covariance matrix of the parameters of the model is given by Pc Y Ps T II. Y=a + B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B1-B2 and 33=1 A researcher estimated a demand equation for gari and obtained the following results: C Pe Y Ps T C 192.5 -5.21 2.11 -7.91 0.18 0.35 8.98 -3.01 -0.33 6.64 1.35 -0.02 -0.6 -0.12 0.02 Compute the estimated t-statistics. Carefully examine whether the estimated 1-statistics are significant at the 5 percent level. Interpret fully the results of the model. Suggest any policy implications of the estimated model.
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