This two-part study aims to identify and quantify the determinants of the price ofApple iPods sold on eBay in the late pre-iPhone era (2006). Specifically, we areinterested in the final auction price of an operational 4 GB iPod mini.Suppose you've come up with the following specification:1price - Bo + Bibidrs + B2blue + B3pink + B40clr + Banclr + Borefb +B7new + Beunkn + B9cdef + &where: price = the final auction price of the iPod ($)bidrs = the number of bidders in the auctionblue = 1 if the color of the iPod is blue, 0 otherwisepink = 1 if the color of the iPod is pink. 0 otherwiseoclr = 1 if the color of the iPod is other than silver, blue, or pink,0 otherwisenclr = 1 if the color is not reported: 0 otherwiserefb= 1 if the iPod is refurbished, 0 otherwisenew = 1 if the iPod is new. 0 otherwiseunkn = 1 if whether the iPod is new, refurbished, or used is unknown.0 otherwisecdef =(1)1 if the iPod has a cosmetic defect (such as a scratch). 0 otherwise(for new and refurbished items, cdef = 0 by definition)Question 1In the equation above, the dummy variable oclr indicates the color category "otherthan silver, blue, or pink." But there is no variable for the silver color in theequation. Is this an error in the oclr category definition? Explain your answer.Question 2What is the reference (base) category for the iPod's condition? Explain.Hint: Since new and refurbished items have no defects (by definition), the uniquelydefined condition categories are "new," "refurbished," "used with no defects," and "usedwith defects."

A regression model is a statistical method used in data analysis to describe and quantify the…

This two-part study aims to identify and quantify the determinants of the price of Apple iPods sold on eBay in the late pre-iPhone era (2006). Specifically, we are interested in the final auction price of an operational 4 GB iPod mini. Suppose you've come up with the following specification:1 price = Bo + Bibidrs + B₂blue + B3pink + B40clr + Benclr + Borefb + B7new + Bsunkn + B⁹cdef + ε where: price = the final auction price of the iPod ($) (1)

This two-part study aims to identify and quantify the determinants of the price of Apple iPods sold on eBay in the late pre-iPhone era (2006). Specifically, we are interested in the final auction price of an operational 4 GB iPod mini. Suppose you've come up with the following specification:1 price = Bo + Bibidrs + B₂blue + B3pink + B40clr + Benclr + Borefb + B7new + Bsunkn + B⁹cdef + ε where: price = the final auction price of the iPod ($) (1)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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