The following two models were estimated to analyze the demand for chicken around
Mzumbe universitycampus.
I.Qc = 43.310 –15.298Pc –9.86Pb + 39.8Pf + 1.87Y.
(3.05)(45.467)(13.44)(20.245)(0.154)
R-square=0.98
II.Qc=-17.288+61.138Pc+2.046Y.
(1.92) (22.8) (0.077)
R-square=0.99
Where Qc = quantity of chicken demanded in 2012.
Pc=price ofchicken.
Pb = price of beef.
Pf = price of fish.
Y=income.
The variances of Prices of beef and fish are respectively180.49and409.87,and their
covarianceis 112.54.Figuresinparenthesis are t-ratios.
Required:
i)Do the prices of chicken,beef and fish and income simultaneouslybinfluence
demand for chicken?
1 answer
Yes, the prices of chicken, beef, and fish and income all simultaneously influence the demand for chicken, as evidenced by the high R-squared values of both models (0.98 and 0.99). The t-ratios for all of the variables in both models are also significant, indicating that they have an effect on the demand for chicken.
1 answer