In studying the purchase of durable goods Y (Y = 1 if purchased, Y = 0...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
In studying the purchase of durable goods Y (Y = 1 if purchased, Y = 0 if no purchase) as a function of several variables for a total of 762 house- holds, Janet A. Fisher obtained the following LPM results: Explanatory variable Coefficient Standard error Constant 0.1411 1957 disposable income, X, (Disposable income = X,)2, X2 Checking accounts, X3 Savings accounts, X4 U.S. Savings Bonds, X5 Housing status: rent, X6 Housing status: own, X7 Monthly rent, X8 Monthly mortgage payments, Xg Personal noninstallment debt, X10 Age, X11 Age squared, X12 Marital status, X13 (1 = married) Number of children, X14 (Number of children = X14)2, X15 Purchase plans, X16 (1 = planned; 0 otherwise) 0.0251 0.0118 -0.0004 0.0004 -0.0051 0.0108 0.0013 0.0047 -0.0079 0.0067 0.0937 0.0712 -0.0469 0.0136 -0.7540 1.0983 0.5162 -0.9809 -0.0367 0.0326 0.0046 0.0084 -0.0001 0.0001 0.1760 0.0501 0.0398 0.0358 -0.0036 0.0072 0.1760 0.0384 R? = 0.1336 Notes: All financial variables are in thousands of dollars. Housing status: Rent (1 if rents; 0 otherwise) Housing status: Own (1 if owns; O otherwise) Source: Janet A. Fisher, "An Analysis of Consumer Good Expenditure," The Review of Economics and Statistics, vol. 64, no. 1, Table 1, 1962, p. 67. a. Comment generally on the fit of the equation. b. How would you interpret the coefficient of -0.0051 attached to checking account variable? How would you rationalize the negative sign for this variable? c. What is the rationale behind introducing the age-squared and number of children-squared variables? Why is the sign negative in both cases? d. Assuming values of zero for all but the income variable, find out the conditional probability of a household whose income is $20,000 pur- chasing a durable good. e. Estimate the conditional probability of owning durable good(s), given: X1 = $15,000, X3 = $3000, X4 = $5000, X6 = 0, X7 = 1, Xg = $500, X9 = $300, X10 = 0, X11 = 35, X13 = 1, X14 = 2, X16 = 0. In studying the purchase of durable goods Y (Y = 1 if purchased, Y = 0 if no purchase) as a function of several variables for a total of 762 house- holds, Janet A. Fisher obtained the following LPM results: Explanatory variable Coefficient Standard error Constant 0.1411 1957 disposable income, X, (Disposable income = X,)2, X2 Checking accounts, X3 Savings accounts, X4 U.S. Savings Bonds, X5 Housing status: rent, X6 Housing status: own, X7 Monthly rent, X8 Monthly mortgage payments, Xg Personal noninstallment debt, X10 Age, X11 Age squared, X12 Marital status, X13 (1 = married) Number of children, X14 (Number of children = X14)2, X15 Purchase plans, X16 (1 = planned; 0 otherwise) 0.0251 0.0118 -0.0004 0.0004 -0.0051 0.0108 0.0013 0.0047 -0.0079 0.0067 0.0937 0.0712 -0.0469 0.0136 -0.7540 1.0983 0.5162 -0.9809 -0.0367 0.0326 0.0046 0.0084 -0.0001 0.0001 0.1760 0.0501 0.0398 0.0358 -0.0036 0.0072 0.1760 0.0384 R? = 0.1336 Notes: All financial variables are in thousands of dollars. Housing status: Rent (1 if rents; 0 otherwise) Housing status: Own (1 if owns; O otherwise) Source: Janet A. Fisher, "An Analysis of Consumer Good Expenditure," The Review of Economics and Statistics, vol. 64, no. 1, Table 1, 1962, p. 67. a. Comment generally on the fit of the equation. b. How would you interpret the coefficient of -0.0051 attached to checking account variable? How would you rationalize the negative sign for this variable? c. What is the rationale behind introducing the age-squared and number of children-squared variables? Why is the sign negative in both cases? d. Assuming values of zero for all but the income variable, find out the conditional probability of a household whose income is $20,000 pur- chasing a durable good. e. Estimate the conditional probability of owning durable good(s), given: X1 = $15,000, X3 = $3000, X4 = $5000, X6 = 0, X7 = 1, Xg = $500, X9 = $300, X10 = 0, X11 = 35, X13 = 1, X14 = 2, X16 = 0.
Expert Answer:
Related Book For
Posted Date:
Students also viewed these economics questions
-
In studying the purchase of durable goods Y (Y = 1 if purchased, Y = 0 if no purchase) as a function of several variables for a total of 762 households, Janet A. Fisherobtained the following LPM...
-
If 3x < f(x) < x3 + 2 for 0 < x < 2 evaluate lim x1 f(x)
-
What is the shear capacity of the RC beam described below considering the steel reinforcement and using the formula: VRsyAw 2fyd cot 8/s The shear reinforcement in the beam is provided by sets of...
-
Our model of pollution in this chapter assumed that emissions are a pure private bad, and that people have no ability to protect themselves from the adverse consequences of exposure. In reality,...
-
Mr. Evans is a wholesaler who buys and sells a wide range of products, one of which is the Laker. Mr. Evans sells 24 000 units of the Laker each year at a unit price of 20. Sales of the Laker...
-
Although anxiety is self-limiting, the nurse can help to reduce anxiety by: (Select all that apply.) 1. providing a safety net for the patient. 2. teaching relaxation exercises. 3. helping the...
-
Using \(q_{0.05}=4.339\) for the Tukey HSD method, compare the treatments in Exercise 12.45. Data From Exercise 12.45 12.45 Given the following data from a randomized block design, Blocks 1 234...
-
The following amortization and interest schedule is for the issuance of 10-year bonds by Capulet Corporation on January 1, 2004, and the subsequent interest payments and charges. The companys...
-
A scuba diver is exploring a shipwreck at a depth of 30 meters in the ocean. The diver's tank contains 5.0 moles of compressed air at a temperature of 25C. What is the pressure of the air in the tank...
-
Samuel C. Mazilly wrote a personal check that was drawn on Calcasieu- Marine National Bank of Lake Charles, Inc. (CMN Bank). The check was made payable to the order of Lee St. Mary and was delivered...
-
There are various ways to implement Management by Objectives (MBO). For instance, one way is for top management to tell the next level down what to do, and for the next level to tell the level below...
-
How can internal auditors use histograms during internal audits?
-
If total spending is just sufficient to purchase an economys output, then the economy is: a. in equilibrium. b. in recession. c. in debt. d. in expansion.
-
Equity is often examined in the context of compliance with government employment and termination laws. Give three examples of how equity manifests itself in operations and the costs to the...
-
What are the five maturity levels in the CMMI Model?
-
What is ITIL and how can it help improve the practice of integrated auditing?
-
A gross margin of 49.4% is targeted by a gift department. Retail reductions are 16% and cash discount are 4%, with alterations cost of 1%. Find the initial markup percentage.
-
Write a while loop that uses an explicit iterator to accomplish the same thing as Exercise 7.3. Exercise 7.3. Write a for-each loop that calls the addInterest method on each BankAccount object in a...
-
Suppose that a biased coin that lands on heads with probability p is flipped 10 times. Given that a total of 6 heads results, find the conditional probability that the first 3 outcomes are (a) h, t,...
-
If X is an exponential random variable with mean 1/, show that E[Xk] = k! / kk = 1, 2, . . .
-
Find Var(X) if P(X = a) = p = 1 P(X = b)
-
What did the temperance reformers see as the cause of wife abuse? How did they propose to solve the problem?
-
What kinds of qualifications might a statute place on someone who is in a dating relationship? What problems might these qualifications pose?
-
In brief, what is a civil order of protection?
Study smarter with the SolutionInn App