A researcher estimates a health care expenditure equation using longitudinal dat

Question

A researcher estimates a health care expenditure equation using longitudinal data and an ordinary least squares technique. The estimated equation is below: Health expenditure = 1,500-25Price + .30!ncome-1.5Age R2=.46 (1.5) (2.02) 1.59) 6.25) a. b, c, d. What does longitudinal data mean? what % of the variation in Health expenditure is explained by the independent variables? which independent variables are significant at the 95% level of a 2 tailed test? If Price is measured in dollars and health expenditures are measured in dollars, what does the parameter estimate of price mean? Are there any variables that are missing from the equation? If so, which ones and why. e.

Explanation / Answer

a) Longitudinal data means that the data is measured over time for same population

b) % explained = R^2 = 46%

c) Variables with bracket values greater than 1.96 are significant - Price and Age

d) Parameter estimates are the most likely values of a population.

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