Suppose that the United States enters a recession, and income falls by 2%.Use the regression in column (1) to predict the change in demand.The expected percentage change in demand is %. (Round your response to two decimal places.) Data tableTwo Stage Least Squares Estimatesof the Demand for Cigarettes Using Panel Data for 48 U.S. StatesDependent variable: InRegressorcigarettesi, 1995In(pi $)-Inpcigarettesi, 1995In (Inci, 1995) - In (Inci, 1985)InterceptcigarettesInstrumental variable(s)First-stage F-statisticOveridentifying restrictions J-testand p-value- Incigrattesi, 1985Q(1)-0.94**(0.21)0.53(0.34)-0.12(0.07)Sales tax33.70Print(2)-1.34**(0.23)0.43(0.30)-0.02(0.07)Cigarette-specific tax107.20(3)- 1.20**(0.20)0.46(0.31)-0.05(0.06)DoneBoth sales taxcigarette-specifThese regressions were estimated using data for 48 U.S. states (48 observations on the 10-year differencdata are described in Appendix 12.1. The J-test of overidentifying restrictions is described in Key Conceptp-value is given in parentheses), and the first-stage F-statistic is described in Key Concept 12.5. Individualcoefficients are statistically significant at the *5% level or **1% significance level.88.604.93(0.026)

Recession A large decrease in overall economic activity in a particular area is referred to as a…

Suppose that the United States enters a recession, and income falls by 2%. Use the regression in column (1) to predict the change in demand. The expected percentage change in demand is%. (Round your response to two decimal places.)

Suppose that the United States enters a recession, and income falls by 2%. Use the regression in column (1) to predict the change in demand. The expected percentage change in demand is%. (Round your response to two decimal places.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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