Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Economics Expert

Construction of a 95% confidence interval for the change in demand.

Dependent variable In(Q1 cigarettes 1995)  - (Q1 cigarettes 1985)

Regressor

(1)

(2)

(3)

In (P cigarettes l, 1995) --- In (P cigarettes l, 1985)

-0.94** (0.21)

-1.34** (0.23)

-1.20** (0.20)

In(Incl, 1995) -- In (Inc l, 1985)

0.53 (0.34)

0.43 (0.30)

0.46 (0.31)

Intercept

-0.12 (0.07)

-0.02 (0.07)

-0.05 (0.06)

Instrumental Variables(S)

Sales tax

Cigarette- specific tax

Both sales tax and cigarette - specific tax

First-stage F-statistic

33.70

107.20

88.60

Over identifying restrictions J-test and p-value

-

-

4.93 (0.026)

This problem refers to the panel data regressions sumarized in Table

a. Suppose that federal government is considering new tax on cigarettes that is estimated to increase the retail price by $0.10 per pack. If the current price per pack is $2.00, use the regression in column(1) to predict the change in demand. Construct a 95% confidence interval for the change in demand.

b. Assume that the United States  enters a recession and income falls by 2%. Use the regression in column (1) to predict the change in demand.

c. Recession typically last less than one year. Do you think that the regression in column (1) will provide a reliable answer to the problem in (b)? Why or why not?

d. Suppose that the F-stastistic enters incolumn (1) was 3.6 instead of 33.6. What would the regression gives a reliable answer to the problem posted in (a)? Why or why not?

 

 

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M919563

Have any Question? 


Related Questions in Business Economics

Mr jones intends to retire in 20 years at the age of 65 as

Mr. Jones intends to retire in 20 years at the age of 65. As yet he has not provided for retirement income, and he wants to set up a periodic savings plan to do this. If he makes equal annual payments into a savings acco ...

Latin america has a wealth of regional trade agreements

Latin America has a wealth of regional trade agreements. Look into Chile’s recent agreement with China and analyze their likely effects on exports and imports. What products are most likely to be involved in expanded Chi ...

The first requirement is to list all of the components that

The first requirement is to list all of the components that are present in your network, to describe which components must be monitored, and to identify the security requirements of each monitored component. Your manager ...

Describe the considerations that have to be taken when

Describe the considerations that have to be taken when writing an application designed to drive a database by more than one simultaneous user?

Assignmentquestion assume that you have been assigned to

Assignment Question: Assume that you have been assigned to design a professional development program to provide y our schools mentor teachers with knowledge about adult learning and development that will be valuable in h ...

King lear was worried about how his children would treat

King Lear was worried about how his children would treat him in his old age. Much to his regret, he discovered that children do not always deliver what they promise. In addition to love and respect, children are also mot ...

Many cities have experienced a substantial decrease in the

Many cities have experienced a substantial decrease in the amount of garbage being collected after they changed from levying a flat tax on each household to a system where the homeowner is charged a fee for each bag or c ...

The following is spending information for a given year in a

The following is spending information for a given year in a given country: Businesses spent $2800 on factories and equipment used in production Households spent $1500 on services Households spent $4000 on houses Governme ...

A teacher has taught high school for twenty years and has

A teacher has taught high school for twenty years and has become increasingly annoyed with the disruption that tardiness creates. still, the teacher cares about all students and wants them to be successful. how would bia ...

Suggest three 3 strategies that a public leader could use

Suggest three (3) strategies that a public leader could use in order to do the following: persuade other governmental departments to work collaboratively to reduce financial burdens, increase sufficiency in the delivery ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate