1. Based on the regression model, determine the best (point) estimate of yearly
ID: 3277828 • Letter: 1
Question
1. Based on the regression model, determine the best (point) estimate of yearly per-capital soft drink demand in a state where 6-pack price is $2.20, per capita income is $18 and mean temperature is 54F. Then, construct an approximate 95 percent prediction interval.
2. Determine the (point) price elasticity and (point) income elasticity, respectively, at the state mentioned in question 6. (Hint: use estimated demand equation.) Give an economic interpretation of each of the elasticities
The following is the data cans/capita/yr 6 pack price income/capita mean temp
cans/capita/yr 6 pack price income/capita mean temp Alabama 200 2.19 13 66 Arizona 150 1.99 17 62 Arkansas 237 1.93 11 63 California 135 2.59 25 56 Colorado 121 2.29 19 52 Connecticut 118 2.49 27 50 Delaware 217 1.99 28 52 Florida 242 2.29 18 72 Georgia 295 1.89 14 64 Idaho 85 2.39 16 46 Illinois 114 2.35 24 52 Indiana 184 2.19 20 52 Iowa 104 2.21 16 50 Kansas 143 2.17 17 56 Kentucky 230 2.05 13 56 Louisiana 269 1.97 15 69 Maine 111 2.19 16 41 Maryland 217 2.11 21 54 Massachusetts 114 2.29 22 47 Michigan 108 2.25 21 47 Minnesota 108 2.31 18 41 Mississippi 248 1.98 10 65 Missouri 203 1.94 19 57 Montana 77 2.31 19 44 Nebraska 97 2.28 16 49 Nevada 166 2.19 24 48 New Hampshire 177 2.27 18 35 New Jersey 143 2.31 24 54 New Mexico 157 2.17 15 56 New York 111 2.43 25 48 North Carolina 330 1.89 13 59 North Dakota 63 2.33 14 39 Ohio 165 2.21 22 51 Oklahoma 184 2.19 16 82 Oregon 68 2.25 19 51 Pennsylvania 121 2.31 20 50 Rhode Island 138 2.23 20 50 South Carolina 237 1.93 12 65 South Dakota 95 2.34 13 45 Tennessee 236 2.19 13 60 Texas 222 2.08 17 69 Utah 100 2.37 16 50 Vermont 64 2.36 16 44 Virginia 270 2.04 16 58 Washington 77 2.19 20 49 West Virginia 144 2.11 15 55 Wisconsin 97 2.38 19 46 Wyoming 102 2.31 19 46Explanation / Answer
y^ = 514.2669 -242.9707 *6 pack price + 1.224163*incom/capita + 2.931228 * mean temp
= 514.2669 -242.9707*2.2 + 1.224163*18 +2.931228 *54
= 160.052
SUMMARY OUTPUT Regression Statistics Multiple R 0.835478305 R Square 0.698023997 Adjusted R Square 0.677434724 Standard Error 38.26108281 Observations 48 ANOVA df SS MS F Significance F Regression 3 148889.8565 49629.95217 33.9023141 1.64557E-11 Residual 44 64412.06016 1463.910458 Total 47 213301.9167 Coefficients Standard Error t Stat P-value Lower 95% Intercept 514.2669369 113.3315243 4.537721874 4.3638E-05 285.8622576 6 pack price -242.9707509 43.52628127 -5.58216194 1.3824E-06 -330.6922068 income/capita 1.224163793 1.522612776 0.803988914 0.42572594 -1.844460624 mean temp 2.931228055 0.711458375 4.120027476 0.00016454 1.497377915Related Questions
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