Refer to the Statistics in Action problem for this chapter. Recall that we built a model for

Question:

Refer to the Statistics in Action problem for this chapter. Recall that we built a model for y = natural logarithm of supply price for an intrastate trucking shipment as a function of the following independent variables: x₁ = Distance shipped (hundreds of miles), x₂ = Weight of product shipped (thousands of pounds), x₃ = {1 if Deregulation in effect, 0 if not}, and x₄ = {1 if trip originates in Miami, 0 if in Jacksonville}. The estimated equation for the best model of y (from the SAS printout for Model 7) was:

a. Based on the equation, give an estimate of the difference between the predicted regulated price and predicted deregulated price for any fixed value of mileage, weight and origin.

b. Demonstrate the impact of deregulation on price charged using the estimated β’s, but now hold distance fixed at 100 miles, origin fixed at Miami, and weight fixed at 10,000 pounds.

c. The data file TRUCKING contains data on trucking prices for four Florida carriers (A, B, C, and D). These carriers are identified by the variable CARRIER.

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