Please use the data attached to estimate the demand function for Pizza using the

Question

Please use the data attached to estimate the demand function for Pizza using the Ordinary Least Squares Method.

Y = Quantity

X1 = Price of Pizza

X2 = Tuition

X3 = Price of Soft Drinks

X4 = Location

-----------

A) Write out an equation for the estimated demand function

B) Interpret the signs and values of all the estimated coefficients

C) Using the t-tests determine which coefficients are non-zero.

D) Compute the price elasticity, cross price elasticity and income elasticity of Pizza.

E) How confident are you that the sample used in this exercise is a good fit for the entire population?

* I mainly need help with parts E & D *

College Y X1 X2 X3 X4 1 10 100 14 100 1 2 12 100 16 95 1 3 13 90 8 110 1 4 14 95 7 90 1 5 9 110 11 100 0 6 8 125 5 100 0 7 4 125 12 125 1 8 3 150 10 150 0 9 15 80 18 100 1 10 12 80 12 100 1 11 13 90 6 80 1 12 14 100 5 75 1 13 12 100 12 100 1 14 10 110 10 125 0 15 10 125 14 130 0 16 12 110 15 80 1 17 11 150 16 90 0 18 12 100 12 95 1 19 10 150 12 100 0 20 8 150 10 90 0 21 9 150 13 95 0 22 10 125 15 100 1 23 11 125 16 95 1 24 12 100 17 100 0 25 13 75 10 100 1 26 10 100 12 110 1 27 9 110 6 125 0 28 8 125 10 90 0 29 8 150 8 80 0 30 5 150 10 95 0

Explanation / Answer

D) Price Elasticity = (dQ/dX1)*[X1(bar)/Q(bar)]

Ed = -0.089*(115/10.233)

Ed = 1.00

Cross Prrice Elasticity = (dQ/dX3)*[X3(bar)/Q(bar)]

Ed = -0.078*(100.33/10.233)

Ed = -0.76,

E . The adjusted R2 for the given data is 68% . It suggests that the independent variable explains 68% of variation in dependent variable after controlling for degrees of freedom..

Also the F-value is also sufficiently large which suggests that all the variable are jointly significant.

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---