Refer to the demand for roses function of Exercise 7.16. Confining your considerations to the logarithmic specification,

Question:

a. What is the estimated own-price elasticity of demand (i.e., elasticity with respect to the price of roses)?

b. Is it statistically significant?

c. If so, is it significantly different from unity?

d. A priori, what are the expected signs of X₃ (price of carnations) and X4 (income)? Are the empirical results in accord with these expectations?

e. If the coefficients of X₃ and X₄ are statistically insignificant, what may be the reasons?

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Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

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Question Posted: Apr 30, 2018 05:04 AM

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Refer to the demand for roses function of Exercise 7.16. Confining your considerations to the logarithmic specification,

Question:

Step by Step Answer:

a The ownprice elasticity is 1274 b From the t test we obtain t 12740 0527 24174 The ...View the full answer

Basic Econometrics

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