Question: Your assistant has estimated the following model for the demand for bus travels: ^BUSTRAVL = -9.33e+03 +0.293* DENSITY + 2.59* LANDAREA + 1.38e+03*1_POP (3.24e+03)

Your assistant has estimated the following model for the demand for bus

Your assistant has estimated the following model for the demand for bus travels: ^BUSTRAVL = -9.33e+03 +0.293* DENSITY + 2.59* LANDAREA + 1.38e+03*1_POP (3.24e+03) (0.0833) (3.47) (648) n = 40, R-squared = 0.778 (standard errors in parentheses) Tasks: 1. Use the model and estimate the demand for bus travels in a city with land area of 50 square miles, population of 0.5 million of inhabitants and density of 2 thousands of persons per square mile. 2. Provide the interpretation of the estimated parameters. 3. Test the individual significance of the estimated parameters (use 10% significance level) and provide the economic interpretation of your results. For testing the significance, state clearly your hypotheses, the test statistic and its sampling distribution. 4. Evaluate as well how well given model explains the demand for bus travels. Describe briefly the weaknesses of this model.

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