Ask Question, Ask an Expert


Ask Business Economics Expert

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

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





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)


-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




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

Assignmentinstructions1 select an illegal activity and

Assignment Instructions 1. Select an illegal activity and transform/mask its' true purpose with the disguise of a legitimate business operation. In other words, create a start-up business that would be viewed as a legal ...

Assignmentpart idirections please write a paper that is at

Assignment PART I Directions: Please write a paper that is at least two to three pages in length in which you address the questions below. Write your paper in APA format with at least one cited scholarly reference. Revie ...

Question 1 for the following situations calculate

Question 1 . For the following situations, calculate elasticity of demand and comment on the answer.                             When the price of commodity X was Rs. 12/-, 40 units it were demanded. When the price decre ...

Allocation and allotments please respond to the following1

"Allocation and Allotments" Please respond to the following: 1. From the first e-Activity, examine and evaluate the disparity of Georgia budget allocation for education and property tax to the various localities. Based o ...

Assessment task in this assessment students are required to

ASSESSMENT TASK: In this assessment, students are required to demonstrate their ability to apply economic principles learnt in this subject to analysing real-world business operations and evaluate how their long-run busi ...

Assignment -consider the following cobb douglas production

Assignment - Consider the following Cobb Douglas production function where Y is maize output, X 1 is labour input, and X 2 is the capital. Data for estimating this equation is given in the Table below. Y = β 0 X 1i β_1 X ...

Free trade and restricted trade - benefits and cost1-2

Free Trade and Restricted Trade - Benefits and Cost 1-2 paragraphs APA format/ no plagarism Using your own words, define both free and restricted trade. What do you feel are the benefits and the cost to having free trade ...

Assignmentmoral and ethical requirements should serve as

Assignment Moral and ethical requirements should serve as drivers which encourage a business to invest in or spend money on cybersecurity products, services, and programs. You have been invited to participate in a "light ...

Chapter 1 managing changeq1 figure 176 shows how bad an

Chapter 1 Managing change Q1 Figure 1.76 shows how bad an implementation can become. Action needs to be taken to prevent this kind of situation. What would you recommend should be done? Q2 You are the project manager for ...

Assignmentarticle reportplease select a marketing topic you

Assignment Article Report Please select a marketing topic you learned and then search in the Wall Street Journal (either online or hardcopy *) and select an article about that topic within the last 12 months. To do this, ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro