The following model was estimated for a sample of 322 supermarkets in large metropolitan areas (Macdonald and Nelson 1991):

where
y = store size
x = median income in zip-code area in which store is located
The number in parentheses under the coefficient is the estimated coefficient standard error.
a. Interpret the estimated coefficient on log x.
b. Test the null hypothesis that income has no impact on store size against the alternative that higher income tends to be associated with larger store size.

Transcribed Image Text:

log(y) 2.921 + 0.680 log(x) R2 0.19