Statistics

1. Consider the model: y = l + [32x2 + 313 + 4x4 + e. Explain how you would go about testing the restriction g 3133 2/34 = 0 by re-writing the model. Explain your method fully. (4 points) 2. A researcher obtained the following Iin-Iog model from the 1992 family expenditure survey of Canada. I?\" = 18.2 + 9.451nX where F = family expenditure on food ($ 000), and X = family budget ($ 000). And, R-squared = 0.59, N = 8054, F = $13589 thousand}? = $33.132 (thousand). a. First interpret the coefficient of lnX, and then show how you can use this coefficient and the other information provided to obtain the elasticity of demand for food with respect to income (the budget). b. If family A spends $2 thousand more on food than family B, by how much would the two families differ in terms of income? Show your work