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    Northwest Florida State College
    Jun-1992 - May-1997

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    Northwest Florida State College,
    Aug-2006 - Nov-2015

Category > Economics Posted 05 May 2017 My Price 9.00

The demand for roses.

Problems7.16. The demand for roses.* Table 7.6 gives quarterly data on these variables:Y = quantity of roses sold, dozensX2 = average wholesale price of roses, $/dozenX3 = average wholesale price of carnations, $/dozenX4 = average weekly family disposable income, $/weekX5 = the trend variable taking values of 1, 2, and so on, for the period1971–III to 1975–II in the Detroit metropolitan areaYou are asked to consider the following demand functions:Yt = a1 + a2X2t + a3X3t + a4X4t + a5X5t + utlnYt = ß1 + ß2 ln X2t + ß3 ln X3t + ß4 ln X4t + ß5X5t + uta. Estimate the parameters of the linear model and interpret the results.b. Estimate the parameters of the log-linear model and interpret theresults.c. ß2, ß3, and ß4 give, respectively, the own-price, cross-price, and incomeelasticities of demand. What are their a priori signs? Do the results concurwith the a priori expectations?*I am indebted to Joe Walsh for collecting these data from a major wholesaler in the Detroitmetropolitan area and subsequently processing them.Gujarati: BasicEconometrics, FourthEditionI. Single-EquationRegression Models7. Multiple RegressionAnalysis: The Problem ofEstimation© The McGraw-HillCompanies, 2004236 PART ONE: SINGLE-EQUATION REGRESSION MODELSYear andquarter Y X2 X3 X4 X51971–III 11,484 2.26 3.49 158.11 1–IV 9,348 2.54 2.85 173.36 21972–I 8,429 3.07 4.06 165.26 3–II 10,079 2.91 3.64 172.92 4–III 9,240 2.73 3.21 178.46 5–IV 8,862 2.77 3.66 198.62 61973–I 6,216 3.59 3.76 186.28 7–II 8,253 3.23 3.49 188.98 8–III 8,038 2.60 3.13 180.49 9–IV 7,476 2.89 3.20 183.33 101974–I 5,911 3.77 3.65 181.87 11–II 7,950 3.64 3.60 185.00 12–III 6,134 2.82 2.94 184.00 13–IV 5,868 2.96 3.12 188.20 141975–I 3,160 4.24 3.58 175.67 15–II 5,872 3.69 3.53 188.00 16TABLE 7.6d. How would you compute the own-price, cross-price, and income elasticitiesfor the linear model?e. On the basis of your analysis, which model, if either, would you chooseand why?

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Status NEW Posted 05 May 2017 12:05 PM My Price 9.00

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