Question
Let's say you decided to try and understand the relationship between the price of oral rehydration salts and demand for oral rehydration salts.You collect detailed
Let's say you decided to try and understand the relationship between the price of oral rehydration salts and demand for oral rehydration salts.You collect detailed data and then run a regression and estimate the following equation relating quantity of packets of oral rehydration salts demanded by a household per month to the price per package in Kenyan Shillings (KSH) (for reference the exchange rate is approximately 100KSH:US$1)
Q_salt=10-0.025P_salt
The standard error on the coefficient on Price is 0.012, and the average Price is 150KSH in the sample and the average Quantity is 6.25 packages per household per month.
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