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Consider the model for demand for housing:
I need help with follow question:
Consider the model for demand for housing:
Log Q = β0 + β1 log P + β2 log Y + u
Where Q = measure of quantity of housing consumed by each of 3, 120 families per year
P = price of unit of housing in family's locality
Y = measure of family income
The estimated model, (with standard errors in parentheses) is:
Log Q = 4.17 - 0.247 log P + 0.96 log Y R2 = .371
(0.11) (0.017) (0.026)
Interpret the slope coefficients. Test for individual significance at 1% confidence.
Test whether β2 is statistically different from 1. What is the economic interpretation of such test?
By what percentage is housing predicted to increase if income increases by 10%?
