Please answer the four parts from from v please. b. An economist wants to invest
ID: 3318994 • Letter: P
Question
Please answer the four parts from from v please.
b. An economist wants to investigate the factors that affect household food expenditure. Data from 50 households were collected and processed in Minitab. The regression model is specified below and the Minitab output is presented in Output 5. where E Household Food Expenditure ($'000) X, Household Income X2 = Size of Household X, Inflation Output 5 Coef 5.95 1.95 2.33 0.45 StDev 0.77 0.035 0.8 0.23 t-ratio 2.76 3.64 3.2 1.44 Predictor 0.004 0.000 0.002 0.021 Constant X2 X3 R-sq = 98% R-sq (adj) = 98% Analysis of Variance DF 288 195 483 MS 96 4.239 22.65 0.00 Regression Error Total 46 49 ©The University of the West Indies Course Code: ECON 1005 2016.... page 7 Distinguish between the dependent variable and the independent variables in this output. 12 marks) [1 mark] 3 marks] [2 marks) [4 marks] 3 marks] 3 marks) i. i. Write out the regression equation. iii. Is the coefficient 1 significant? iv. Interpret the value of the coefficient 3. v. Is significantly different from 2. Ovi.Perform the F test vi. Give an interpretation for R-sq and comment on its value. vili. Using the correlation output below, comment on the relationships among the variables 3 marks) Correlation Output X, 0.30 0.89 0.78Explanation / Answer
Solutiona:
dependent variable is
y=Household food expenditure
Indpeendent variables are:
household income--x1
size of household---x2
inflation---x3
Solutionb:
regression eq is
y=5.95+1.95x1+2.33x2+0.45x3
Solutionc:
For slope beta1
slope=1.95
t=3.64
p=0.00
p<0.05
Reject Null hypothesis
Accept alternative Hypothesis.
Slope is different form zero.
Coeffiicient beta1 is significant
Solutiond:
Coefficient beta3=0.45
slope=m=change in y/change in X
0.45=change in household exp/change ininflation
For unit iincrease in inflation ,house hold expenditure incraeses by 0.45 $,holding all other coefficient constant.