TABLE 7-10 VALUE ADDED, LABOR HOURS, AND CAPITAL INPUT IN THE MANUFACTURING SECT
ID: 1143611 • Letter: T
Question
TABLE 7-10 VALUE ADDED, LABOR HOURS, AND CAPITAL INPUT IN THE MANUFACTURING SECTOR OF THE U.S., 2005 Output Labor Input Capital Input Value added Worker Hrs Capital expends Area Year (thousands of $) (thousands) (thousands of $) Y X2 X3 Alabama 2005 38,372,840 424,471 2,689,076 Alaska 2005 1,805,427 19,895 57,997 Arizona 2005 23,736,129 206,893 2,308,272 Arkansas 2005 26,981,983 304,055 1,376,235 California 2005 217,546,032 1,809,756 13,554,116 Colorado 2005 19,462,751 180,366 1,790,751 Connecticut 2005 28,972,772 224,267 1,210,229 Delaware 2005 14,313,157 54,455 421,064 District of Columbia 2005 159,921 2,029 7,188 Florida 2005 47,289,846 471,211 2,761,281 Georgia 2005 63,015,125 659,379 3,540,475 Hawaii 2005 1,809,052 17,528 146,371 Idaho 2005 10,511,786 75,414 848,220 Illinois 2005 105,324,866 963,156 5,870,409 Indiana 2005 90,120,459 835,083 5,832,503 Iowa 2005 39,079,550 336,159 1,795,976 Kansas 2005 22,826,760 246,144 1,595,118 Kentucky 2005 38,686,340 384,484 2,503,693 Louisiana 2005 69,910,555 216,149 4,726,625 Maine 2005 7,856,947 82,021 415,131 Maryland 2005 21,352,966 174,855 1,729,116 Massachusetts 2005 46,044,292 355,701 2,706,065 Michigan 2005 92,335,528 943,298 5,294,356 Minnesota 2005 48,304,274 456,553 2,833,525 Mississippi 2005 17,207,903 267,806 1,212,281 Missouri 2005 47,340,157 439,427 2,404,122 Montana 2005 2,644,567 24,167 334,008 Nebraska 2005 14,650,080 163,637 627,806 Nevada 2005 7,290,360 59,737 522,335 New Hampshire 2005 9,188,322 96,106 507,488 New Jersey 2005 51,298,516 407,076 3,295,056 New Mexico 2005 20,401,410 43,079 404,749 New York 2005 87,756,129 727,177 4,260,353 North Carolina 2005 101,268,432 820,013 4,086,558 North Dakota 2005 3,556,025 34,723 184,700 Ohio 2005 124,986,166 1,174,540 6,301,421 Oklahoma 2005 20,451,196 201,284 1,327,353 Oregon 2005 34,808,109 257,820 1,456,683 Pennsylvania 2005 104,858,322 944,998 5,896,392 Rhode Island 2005 6,541,356 68,987 297,618 South Carolina 2005 37,668,126 400,317 2,500,071 South Dakota 2005 4,988,905 56,524 311,251 Tennessee 2005 62,828,100 582,241 4,126,465 Texas 2005 172,960,157 1,120,382 11,588,283 Utah 2005 15,702,637 150,030 762,671 Vermont 2005 5,418,786 48,134 276,293 Virginia 2005 49,166,991 425,346 2,731,669 Washington 2005 46,164,427 313,279 1,945,860 West Virginia 2005 9,185,967 89,639 685,587 Wisconsin 2005 66,964,978 694,628 3,902,823 Wyoming 2005 2,979,475 15,221 361,536 Table 7-10 on the textbook's Web site contains data about the manufacturing sector of all 50 states and the District of Columbia. The dependent variable is output, measured as "value added" in thousands of U.S. dollars, and the in- dependent variables are worker hours and capital expenditures a. Predict output using a standard linear model. What is the function? b. Create a log-linear model using the data as well. What is this function? c. Use the MWD test to decide which model is more appropriate. 7.21.Explanation / Answer
a) the linear regression equation is
9.951891
with regression statistics as
so the equation is Y= 233621.6 + 47.98 X2 + 9.95X3
b) using a log-linear regression
regression statistics are
so the equation is
log Y = 6.89 + 1.08 E-6 X2 + 2.28E-8 X3
Coefficients Intercept 233621.6 X2 47.98736 X39.951891
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