Suppose you decide to estimate a student consumption function. After you run an OLS regression on your data set with 36 observations, you obtain the following. The estimated regression, along with standard errors and t-statistics, CO = - 47.143 + 0.9714 YD (se) (2.0307) (0.157) (t) ( ) (6.187) Where, CO : the average annual consumption expenditures of the students on items other than tuition and room. YD : the average annual disposable income (including gifts) of the students a) Interpret the slope and the intercept. b) Compute the test statistics ( t value and critical t ) for the intercept of the regression. Note that significance level is 0.10. c) Suppose that disposable income is increased by 1000 dollars on average. What would be the predicted consumption expenditures?
Suppose you decide to estimate a student consumption function. After you run an OLS regression on your data set with 36 observations, you obtain the following. The estimated regression, along with standard errors and t-statistics,
CO = - 47.143 + 0.9714 YD
(se) (2.0307) (0.157)
(t) ( ) (6.187)
Where,
CO : the average annual consumption expenditures of the students on items other than tuition and room.
YD : the average annual disposable income (including gifts) of the students
a) Interpret the slope and the intercept.
b) Compute the test statistics ( t value and critical t ) for the intercept of the regression. Note that significance level is 0.10.
c) Suppose that disposable income is increased by 1000 dollars on average. What would be the predicted consumption expenditures?
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