(1)The first regression equation in Table II is estimated as quadratic in levels

Question

(1)The first regression equation in Table II is estimated as quadratic in levels of income (G) with the dependent variable being total automotive lead emissions (in millions of grams). Regression coefficients, standard errors and R2 are shown below.

Lead = 25,149 – 1.58G + 0.0003G2 – 11,476D83 + 8.97D83G –

(9,435)     (2.89)    (0.0002)      (3,623)        (2.36)          

0.0008D83G2            

          (0.0002)

                        + 38.4(popdensity) – 308(year)

                        (14.5)                      (148)

where D83 represents 1 for the post-1983 period and zero for the pre-1983 period

R2 = 0.68

                        N = 528

F-Test of hypothesis that all time-interaction coefficients equal

to zero = 5.14

1) What does the term “quadratic in levels of income” mean?

Explanation / Answer

The regression equation is estimated as quadratic in levels of income it means in given regression model dependant variable total automotive lead emmision is expressed as a quadratic function of levels of income.(G&G2)

i.e there is quadratic relationship associated between automotive lead emmision & levels income variables.

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