Wharton Econometric Forecasting, LLC has been hired to analyze demand in 30 regional markets for Product Y, a major item. A statistical analysis of demand in these markets shows (standard errors in parentheses): QY = 26,950 − 450P + 220PX + 0.08A + 0.01I (11,000) (150) (180) (0.3) (0.05) R2 = 0.95 Standard Error of the Estimate = 10 Here, QY is market demand for Product Y, P is the price of Y in dollars, A is dollars of advertising expenditures, PX is the average price in dollars of another (unidentified) product, and I is dollars of household income. In a typical market, the price of Y is $100, PX is $70, advertising expenditures are $50,000, and the average family income is $60,000. 1. Which variables in this regression model are statistically significant at the 95 percent confidence level? Show your work.
Wharton Econometric
QY = 26,950 − 450P + 220PX + 0.08A + 0.01I
(11,000) (150) (180) (0.3) (0.05)
R2 = 0.95
Standard Error of the Estimate = 10
Here, QY is market demand for Product Y, P is the
1. Which variables in this regression model are statistically significant at the 95 percent confidence level? Show your work.
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