Please help with part D and F. I think for part F, the answer is the regression
ID: 3205447 • Letter: P
Question
Please help with part D and F. I think for part F, the answer is the regression with CPI due to its higher R squared, but I feel like there must be more to the answer.
6.(30) Elmer Working did a study of US meat demand. From his data I have taken per capita pork consumption in pounds per person (PO), pork price (PP), beef price (BP), both in nominal cents per pound, the consumer price index (CPI, 1935-1939-100), and disposable income per capita (INC in nominal dollars. The data is in the file: Pork.Working.xlsx. se the CPI to turn the prices and income into real dollars in the sheet named Real Data. a. Calculate descriptive statistics for the five variables (use real prices and income) and fill in the following table INC CPI PQ PP BP 23.63 66.39 21.96 119.35 112.55 Mean 29.62 26.88 6.23 3.32 5.18 Std. Dev 75.97 14.77 48.1 18.21 70.7 Minimum 164.76 30.08 79.1 38.p7 189.8 Maximum 40 40 40 40 40 ObservationsExplanation / Answer
D.
We could agree with all the signs of estimated slopes.
The sign of estimated slope for real pork price is negative. Which means as the pork price increases the consumption is decreased which any one can expect.
The sign of estimated slope for beef price is positive. Which means as the beef price increases the consumption of pork is increased and the model is adjuested for price of port also. Hence, as beef price is increased people prefer for pork.
Similalrly for CPI and INC, the sign of estimated slope is positive
F. Out of two models, model 1 is better becuase, it has the R-square value of 0.52 which is more than the 2nd model.
Because, it is genreal tendency that as pric increases the consumption decreases which is proven.
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