Question
Estimate the demand curve using regression analysis. Write down the equational form. Interpret the coefficients, statistical significance and R2. What are the limitations of your
Estimate the demand curve using regression analysis. Write down the equational form. Interpret the coefficients, statistical significance and R2. What are the limitations of your specification (omitted variables, correlation vs. causality)?
| Quantity | Price |
| 84 | 59 |
| 80 | 65 |
| 85 | 54 |
| 83 | 61 |
| 81 | 64 |
| 84 | 58 |
| 87 | 48 |
| 78 | 68 |
| 82 | 63 |
| 76 | 70 |
| 79 | 65 |
| 75 | 80 |
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
1 Multiple regression even given a perfect fit along some line in Rn doesnt imply direction Its similar to why correlation isnt causation simplistical...
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
