Chrome File Edit View History Bookmarks Profiles Tab Window Help Q 8 Tue Mar 1 9:41 AM ... Houston, TX We X Bb Slides - 2022SF X Bb Slides - 2022SF X Microsoft Word X market share ca x ECON 4395 : A X Microsoft Word X Microsoft Word X + - C D @ File | /Users/kennyphipps/Desktop/practice_midterm1_s2022.pdf K ... Microsoft Word - practice_midterm1_s2022.docx 5 / 9 1 - 100% + Question 3 (16 points. 4 points each) This question considers Amil Petrin's minvan paper. He quantifies the welfare gain from the minivan innovation. The table below shows the average compensating variation for consumers who bought a minivan when it was introduced. TABLE 8 AVERAGE COMPENSATING VARIATION CONDITIONAL ON MINIVAN PURCHASE, 1984: 1982-84 CPI-ADJUSTED DOLLARS Random Instrumental Random Coefficients OLS Logit Variable Logit Coefficients and Microdata Compensating vari- ation: Median 9,573 5,130 1,217 783 Mean 13,652 7,414 3.171 1,247 Welfare change from differ Observed charac- teristics (8, + pegg) -81,469 -44,249 -820 851 Logit Error (6;) 95,121 51,663 8 091 396 Income of minivan purchasers: Estimate from model 23,728 23,728 99,018 36,091 Difference from actual (CEX) -15,748 -15,748 59.542 -3,385 NOTE. - Compensating omposition of compensation s the average difference in the value of observed and unobserved characteristics between first and second choices. For models, the purchase decisi income. a) Interpret the mean compensating variation, using the OLS logit estimates ($13,652). Make sure you explain what is "compensating variation," and how we compute this for consumers who purchased a minivan. practice_midter....pdf practice_midter....pdf practice_midter....pdf W- Paper topic 1, S....docx citiCompletionCe....pdf Show All X 175 MAR "tv A W