12.55 In a study of the determinants of household expenditures on vacation travel, data were obtained from a sample of 2,233 households (Hagermann 1981). The model estimated was log y = -4.035 + 1.1545 10.05442 log x1 - 0.4468 10.04562 log x2 R2 = 0.161 where y = expenditure on vacation travel x1 = total annual consumption expenditure x2 = number of members in a household The numbers in parentheses under the coefficients are the estimated coefficient standard errors.

a. Interpret the estimated regression coefficients.

b. Interpret the coefficient of determination.

c. All else being equal, find a 95% confidence interval for the percentage increase in expenditures on vacation travel resulting from a 1% increase in total annual consumption expenditures.

d. Assuming that the model is correctly specified, test, at the 1% significance level, the null hypothesis that, all else being equal, the number of members in a household does not affect expenditures on vacation travel against the alternative that the greater the number of household members, the lower the vacation travel expenditures.