Question 1 (25) You work for an airline and are trying to determine the effect that...
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Question 1 (25) You work for an airline and are trying to determine the effect that fuel prices and distance travelled have upon airline fares. You estimate the following model using regression analysis Log(fare) -4.5+0.36 log(fuel price) +0.2112 log(distance) R² -0.90 (0.03) (1.3) (0.15) Where the numbers in parentheses are standard errors. The model was estimated on a cross section of 100 routes flown by a major airline a) What is the econometric model specification underlying the relationship between airline fares, fuel prices and distance travelled? (2) b) Discuss three functional forms used in empirical analysis other than the one used in the model above. c) Differentiate between a time trend variable and a dummy variable d) Interpret the results e) Explain why public transportation is oftentimes regarded as an inferior good. (6) (4) (10) (3) Question 1 (25) You work for an airline and are trying to determine the effect that fuel prices and distance travelled have upon airline fares. You estimate the following model using regression analysis Log(fare) -4.5+0.36 log(fuel price) +0.2112 log(distance) R² -0.90 (0.03) (1.3) (0.15) Where the numbers in parentheses are standard errors. The model was estimated on a cross section of 100 routes flown by a major airline a) What is the econometric model specification underlying the relationship between airline fares, fuel prices and distance travelled? (2) b) Discuss three functional forms used in empirical analysis other than the one used in the model above. c) Differentiate between a time trend variable and a dummy variable d) Interpret the results e) Explain why public transportation is oftentimes regarded as an inferior good. (6) (4) (10) (3)
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Parta The economic model is logfare 0 1 logfuel price 2 logdistance Here are independnetly and ident... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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