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results of the estimated regression

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You will need to use the PS2 EXCEL spreadsheet (attached) to answer the following questions. You are required to do the analysis for the chicken demand market in the United States between 1960 and 1999.

According to the theory, you know that the quantity of demand for the chicken, Qt, will be affected by the price of the chicken itself, PCt, the price of the close substitute good, i.e. beef, PBt, and average annual personal income, YDt.

Where Qt = per capita chicken consumption (in pounds) in year t
PCt = the price of chicken (in cents per pound) in year t
PBt = the price of beef (in cents per pound) in year t
YDt = U.S. per capita disposable income (in hundreds of dollars) in year t

Now, you decide to estimate your model as followings:
Qt = b1+b2PCt +et

1. Report your results of the estimated regression in the form of an equation. Write your results listing the standard errors in parentheses under the numerical estimates of each estimator.

2. What is the estimated value of b2 and what is the economic meaning of this value?

3. What is the predicted value of the average quantity demanded for chicken with the mean value of each of the independent variables?

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Estimating demand function

Assume your research staff used regression analysis to estimate the industry demand curve for Product X.
Qx = 10,000 - 100 Px + 0.5 Y - 1000 r
(3,000) (25) (0.12) (900)
Where Qx is the quantity demanded of Product X, Px is the price of X, Y is income, and r is the prime interest rate (given in decimals, e.g., 0.02 or 0.05) The standard error of each estimated coefficient is given in parentheses below it.

N = 100
R2 = 0.9
F = 15

a. How many degrees of freedom are there?
b. What percentage of the variation in the dependent variable is explained by the equation?
c. Which of the estimated coefficients are significant at the 5% level using a 2-tailed test
d. Perform an F test at the 5% level of the overall explanatory power of the model.
e. If prices remain constant next year but income is expected to increase by 50 and interest rates fall by two percentage points, what is the expected rate of change in the quantity demanded?

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