Week the trend variable taking values
d. Test the models for normality, multicollinerity, heteroscedesticity and model specification.
e. On the basis of your analysis, which model, if either, would you choose and why?
| The demand for chicken in the United States, 1960–1982. To study the
per capita consumption of chicken in the United States, you are given the data in Table, where Y = per capita consumption of chickens, lb X2 = real disposable income per capita, $ X3 = real retail price of chicken per lb, ¢ X4 = real retail price of pork per lb, ¢ X5 = real retail price of beef per lb, ¢ X6 = composite real price of chicken substitutes per lb, ¢, which is a weighted average of the real retail prices per lb of pork and beef, the weights being the relative consumptions of beef and pork in total beef and pork consumption |
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1998
1999
2010
In view of these considerations, answer the following questions. |
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Since specification (5) includes the composite price of beef and pork, would you prefer the demand function (5) to the function (4)? Why?
f. Are pork and/or beef competing or substitute products to chicken? How do you know? g. Assume function (5) is the “correct” demand function. Estimate the parameters of this model, obtain their standard errors, and R2, Adjusted R2. Interpret your results.