You have estimated the following model for demand of grape juice using one
hundred observations.
Qg = 153.81 – 0.75Pg + 0.37Po + 0.65Y.
(0.04) (0.23) (0.02) (0.52) R-square = 0.87
Where
Qg = quantity demanded of grape juice bottles.
Pg = price of grape juice per unit.
Po = Price of orange juice.
Y = Income.
Standard errors are in parenthesis.
i) Interpret the results
ii) Which partial slope coefficients are statistically different from zero? Which test do you
use and why?
iii) Is the income coefficient equal to 1?
iv) Calculate cross-price elasticity when the mean values of price and quantity
demanded are respectively, 25 and 68.
v) Test the significance of the estimated R-square.
vi) Calculate the value of adjusted R-square.
1 answer