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Questions: (1) How much is the income elasticity of chicken consumption, and how much is the own-price elasticity? (2) Explain the procedure of how to conduct the significant test for b.

Questions: (1) How much is the income elasticity of chicken consumption, and how much is the own-price elasticity? (2) Explain the procedure of how to conduct the significant test for b.

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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Question 5 Suppose we have the PRF represented as the equation In Y₁ = b + b₂ ln X₁, + b₂ ln X₂, + b² ln X3, +u, u, -iid N(0,0¹) The corresponding SRF is represented as the equation In Y, =B₁ + B, In X₁, + B₂ In X₂, + B₂ In X3, + e, We use sample data and OLS method to get the estimation output In Y, = 2.03 +0.48 In X₁,-0.35 In X₂ -0.06 In X3 se = (0.10)(0.12) (0.13) (0.13) R² = 0.98 In which Y: is consumption of chicken X₁,: is real income X₂, is real price of chicken X: is real price of beef se indicates the standard error of the estimated coefficients. In indicates the logarithm of the variables, for example, In Y,=log(Y). Questions: (1) How much is the income elasticity of chicken consumption, and how much is the own-price elasticity? (2) Explain the procedure of how to conduct the significant test for b₁.
Transcribed Image Text:Question 5 Suppose we have the PRF represented as the equation In Y₁ = b + b₂ ln X₁, + b₂ ln X₂, + b² ln X3, +u, u, -iid N(0,0¹) The corresponding SRF is represented as the equation In Y, =B₁ + B, In X₁, + B₂ In X₂, + B₂ In X3, + e, We use sample data and OLS method to get the estimation output In Y, = 2.03 +0.48 In X₁,-0.35 In X₂ -0.06 In X3 se = (0.10)(0.12) (0.13) (0.13) R² = 0.98 In which Y: is consumption of chicken X₁,: is real income X₂, is real price of chicken X: is real price of beef se indicates the standard error of the estimated coefficients. In indicates the logarithm of the variables, for example, In Y,=log(Y). Questions: (1) How much is the income elasticity of chicken consumption, and how much is the own-price elasticity? (2) Explain the procedure of how to conduct the significant test for b₁.
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