QUESTION 18

1. Consider a model for the Demand for Bicycles. The model is estimated using time series data and 30 monthly observations and where Q=f(P, Y, W, D). Q is quantity demanded, P is the real price of bicycles, Y is real income, W is real wealth and D indicates if the month is in the summer. D=1 if a summer month and D=0 if the month observed is not in the summer. The model is estimated by OLS and results are provided below with t-statistics shown within parenthesis below the estimated coefficients:

   Q-hat =	4231	-2.31P +	543.21Y +	21.4W +	35.41 D
   	(1.78)	(-2.07)	(10.21)	(4.78)	(2.66)

   The coefficient of D is significantly

   		different from zero (two-tail) at both the 1% and 5% levels
   		different from zero (two-tail) at the 5% significance level
   		different from zero (two-tail) at the 1% significance level
   		not different from zero at either the 5% or 1% (two-tail) level