Write a 4-5 page paper in which you: *Develop a theory based on the first assignment that could be estimated with multiple regression. *State the model in mathematical terms. *Estimate the model and interpret the meaning of the coefficient estimates. *Compare the results from the regression in Assignment 1 with the results from the regression in Assignment 2. *Discuss which model better explains changes in the dependant variable. Your assignment must: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the tile of the assignment, the student?s name, the professor?s name, the course title, and the date. The cover page and the reference page are not included in the required page length. The specific course learning outcomes associated with this assignment are: Apply econometrics to conduct and present the analysis of economic data to support business and public policy decisions. Apply regression analysis to interpret the characteristics of populations and test hypotheses. Use technology and information resources to research issues in econometrics. Write clearly and concisely about econometrics using proper writing mechanics.

Bivariate or two variable regression model is a regression model in which the dependent variable (the regressand) is related to a single explanatory variable (the regressor). Apart from this model has an intercept and one slope coefficient. The best example for this model is the income consumption model where the marginal propensity to consumed is the slope of this model. A relationship between weekly income and consumption can be build up with the help of two variable regression model. In the income consumption model income is considered as independent variable and the consumption as dependent variable. Also we know that rate of change in consumption with change in income is known as marginal propensity to consume. This rate of change is the slope of income consumption model. And generally has an important role in the income consumption model for estimates. Mathematical Expression: We draw the model in mathematical term to make it effective for estimate. Mathematical expression for this model can be expressed as: Y i= 1 + 2 X i +ui 0