In the multiple regression equation: Y=a+B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B₁-B2 and B3 = 1

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
ChapterB: Differential Calculus Techniques In Management
Section: Chapter Questions
Problem 8E
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b.
i.
In the multiple regression equation:
Q=-69.631-1.287 Pc + 1.950 Y₁+2.645 Pst + 1.464 T
F
2020.8
R² (adj) - 0.997
N = 25
DW = 1.478
where Q is quantity demanded of gari, t denotes time period, Pc is the price of gari.
Y is household disposable income, Ps is the price of maize and T is a trend term. N
denotes sample size. The estimated variance-covariance matrix of the parameters
of the model is given by
Pc Y Ps T
II.
Y=a + B₁X₁ + B₂X2 + B3X3 + u
Explain how you will test the joint null hypotheses that:
B1-B2 and 33=1
A researcher estimated a demand equation for gari and obtained the
following results:
C
Pe
Y
Ps
T
C
192.5
-5.21 2.11
-7.91 0.18 0.35
8.98 -3.01 -0.33 6.64
1.35 -0.02 -0.6 -0.12 0.02
Compute the estimated t-statistics. Carefully examine whether the estimated
1-statistics are significant at the 5 percent level.
Interpret fully the results of the model.
Suggest any policy implications of the estimated model.
Transcribed Image Text:b. i. In the multiple regression equation: Q=-69.631-1.287 Pc + 1.950 Y₁+2.645 Pst + 1.464 T F 2020.8 R² (adj) - 0.997 N = 25 DW = 1.478 where Q is quantity demanded of gari, t denotes time period, Pc is the price of gari. Y is household disposable income, Ps is the price of maize and T is a trend term. N denotes sample size. The estimated variance-covariance matrix of the parameters of the model is given by Pc Y Ps T II. Y=a + B₁X₁ + B₂X2 + B3X3 + u Explain how you will test the joint null hypotheses that: B1-B2 and 33=1 A researcher estimated a demand equation for gari and obtained the following results: C Pe Y Ps T C 192.5 -5.21 2.11 -7.91 0.18 0.35 8.98 -3.01 -0.33 6.64 1.35 -0.02 -0.6 -0.12 0.02 Compute the estimated t-statistics. Carefully examine whether the estimated 1-statistics are significant at the 5 percent level. Interpret fully the results of the model. Suggest any policy implications of the estimated model.
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