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Economics 5. The following regression results relate to a study of computer sales (in dollars) as a function of income (1) and season (Quarter 1
Economics 5. The following regression results relate to a study of computer sales (in dollars) as a function of income (1) and season (Quarter 1 (Q1), Quarter 2 (Q2), and Quarter 3 (Q3)). Variable Coefficient Standard error Intercept 418 120 Income 0.82 0.34 Q1 -1.03 0.60 Q2 12.65 2.58 Q3 -4.82 1.23 Income = Income in dollars Q1=1 for quarter 1 and 0 otherwise Q2=1 for quarter 2 and 0 otherwise Q3=1 for quarter 2 and 0 otherwise (a) What is the interpretation of the coefficient on income? What is the interpretation of the coefficient on Q1? (b) Should we have included a dummy variable for quarter 4 in the regression? Why or why not? (c) Find an estimate for computer sales during quarter 1 when income was $20,000
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