Try to do all, if possible, please!

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1. Estimating OLS and 2SLS Coefficients by Hand Suppose you want to estimate soda demand with the following regression model: qsodad=+sodapsoda+ Use the values in the table below to calculate the OLS estimates of the intercept and slope coefficients, ^ and ^ Because the price of soda is likely endogenous, you decide to use the price of sugar, an ingredient in soda, as an instrument for soda prices. Use the values in the table below to calculate the 2SLS estimates of the intercept and slope coefficients, ^ and ^. 6. What is the 2SLS slope coefficient, ^2SLS ? Remember, 2SLS=i=1n(ziz)(xx)i=1n(ziz)(yiy)=cov(z,x)2cov(z,y) where x is the independent variable, y is the dependent variable, and z is the instrument. 7. What is the 2SLS intercept coefficient, ^2SLS ? Remember, ^2SLS=y^2SLSx, where x is the average of the independent variable, y is the average of the dependent variable, and ^2SLS is the 2SLS estimate of the slope coefficient. 8. If the price of soda increases by $1, by how much does soda demand decrease based on the 2SLS estimate? 9. If the P-value associated with the price of soda is 0.0167, are we able to reject the null hypothesis that the 2SLS estimate of soda=0 ? If so, at what significance level do we reject the null hypothesis (i.e. 1%,5%, or 10% )? 10. Does OLS overstate or understate the effect of a change in the price of soda? Hint: OLS understates the effect if ^OLS^2SLS 11. If soda purchases decrease as income increases, is income an omitted variable or an irrelevant variable in the soda demand regression? 12. If consumers consider candy and soda to be complements (..e. a decrease in the price of candy increases soda purchases), is the price of candy an omitted variable or an irrelevant variable in the soda demand regression? 1. Estimating OLS and 2SLS Coefficients by Hand Suppose you want to estimate soda demand with the following regression model: qsodad=+sodapsoda+ Use the values in the table below to calculate the OLS estimates of the intercept and slope coefficients, ^ and ^ Because the price of soda is likely endogenous, you decide to use the price of sugar, an ingredient in soda, as an instrument for soda prices. Use the values in the table below to calculate the 2SLS estimates of the intercept and slope coefficients, ^ and ^. 6. What is the 2SLS slope coefficient, ^2SLS ? Remember, 2SLS=i=1n(ziz)(xx)i=1n(ziz)(yiy)=cov(z,x)2cov(z,y) where x is the independent variable, y is the dependent variable, and z is the instrument. 7. What is the 2SLS intercept coefficient, ^2SLS ? Remember, ^2SLS=y^2SLSx, where x is the average of the independent variable, y is the average of the dependent variable, and ^2SLS is the 2SLS estimate of the slope coefficient. 8. If the price of soda increases by $1, by how much does soda demand decrease based on the 2SLS estimate? 9. If the P-value associated with the price of soda is 0.0167, are we able to reject the null hypothesis that the 2SLS estimate of soda=0 ? If so, at what significance level do we reject the null hypothesis (i.e. 1%,5%, or 10% )? 10. Does OLS overstate or understate the effect of a change in the price of soda? Hint: OLS understates the effect if ^OLS^2SLS 11. If soda purchases decrease as income increases, is income an omitted variable or an irrelevant variable in the soda demand regression? 12. If consumers consider candy and soda to be complements (..e. a decrease in the price of candy increases soda purchases), is the price of candy an omitted variable or an irrelevant variable in the soda demand regression