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Suppose a researcher is interested in estimating the impact of gasoline taxes (Xi) on per capital gallons of gasoline consumer per year(Yi).Assume tax is measure in cents per gallon. the researcher has data from 51 states for a 10 year period for a total of 510 observations. the researcher estimates the linear OLS model Y(i)=beta0+beta1Xi+&i and calculates beta1=-0.90.

suppose instead of measuring taxes in cents per gallon, the researcher measures taxes in dollars per gallon, the researcher measures taxes in dollars per gallon where the new model is Yi=r0+r1Xi*+&i and X*=X/100.what will be the estimate on the coefficient on r1?show mathematical derivation.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91708489

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