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Assume the following simple linear regression model: where (i) If '31 = 5, = 16, = O, = 25. -10, what X value will
Assume the following simple linear regression model: where (i) If '31 = 5, = 16, = O, = 25. -10, what X value will give us E{YIX} ATCO, 02), 0? (ii) Suppose X = 2. For what value of 31 will the marginal variance of Y equal the conditional variance of YIX? How does your answer change when X = 10? (iii) If '31 = -1, around what value would you expect for the R2 from such a regression? (iv) Consider the log-log model log(Y) = 5 4/31 log(X) + E. What does this imply as a model for Y? (I.e., Y=?) What is the approximate expected percentage change in Y per 1% increase in X?
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