Consider the following regression equation for the United States (standard errors in parentheses):
$\begin{array} { c } \hat { \mathrm { P } } _ { \mathrm { t } } = 4.00 - 0.010 \mathrm { PRP } _ { \mathrm { t } } + 0.030 \mathrm { PRB } _ { \mathrm { t } } + 0.20 \mathrm { YD } _ { \mathrm { t } } \\( 0.005 ) \quad ( 0.020 ) \quad ( 0.04 ) \\\overline { \mathrm { R } } ^ { 2 } = 0.98 \quad \mathrm { n } = 29\end{array}$ where: P_t =per capita pounds of pork consumed in time period t
PRP_t =the price of pork in time period t
PRB_t =the price of beef in time period t
YD_t =per capita disposable income in time period t
(a) Hypothesize signs and specify the appropriate null and alternative hypotheses for the coefficients of each of these variables.
(b) State your decision rules and then test your hypotheses on the above results using the t-test at a 5% level of significance.
(c) If you could add one variable to the regression, what variable would you add? Why?

Question

Consider the following regression equation for the United States (standard errors in parentheses):

\begin{array} { c } \hat { \mathrm { P } } _ { \mathrm { t } } = 4.00 - 0.010 \mathrm { PRP } _ { \mathrm { t } } + 0.030 \mathrm { PRB } _ { \mathrm { t } } + 0.20 \mathrm { YD } _ { \mathrm { t } } \\( 0.005 ) \quad ( 0.020 ) \quad ( 0.04 ) \\\overline { \mathrm { R } } ^ { 2 } = 0.98 \quad \mathrm { n } = 29\end{array}

where: P_t =per capita pounds of pork consumed in time period t
PRP_t =the price of pork in time period t
PRB_t =the price of beef in time period t
YD_t =per capita disposable income in time period t
(a) Hypothesize signs and specify the appropriate null and alternative hypotheses for the coefficients of each of these variables.
(b) State your decision rules and then test your hypotheses on the above results using the t-test at a 5% level of significance.
(c) If you could add one variable to the regression, what variable would you add? Why?

Quizplus · Accepted Answer

The Answer of Consider the following regression equation for the United States (standard errors in parentheses): $$\begin{array} { c } \hat { \mathrm { P } } _ { \mathrm { t } } = 4.00 - 0.010 \mathrm { PRP } _ { \mathrm { t } } + 0.030 \mathrm { PRB } _ { \mathrm { t } } + 0.20 \mathrm { YD } _ { \mathrm { t } } \ ( 0.005 ) \quad ( 0.020 ) \quad ( 0.04 ) \ \overline { \mathrm { R } } ^ { 2 } = 0.98 \quad \mathrm { n } = 29 \end{array}$$ where: P_t =per capita pounds of pork consumed in time period t PRP_t =the price of pork in time period t PRB_t =the price of beef in time period t YD_t =per capita disposable income in time period t (a) Hypothesize signs and specify the appropriate null and alternative hypotheses for the coefficients of each of these variables. (b) State your decision rules and then test your hypotheses on the above results using the t-test at a 5% level of significance. (c) If you could add one variable to the regression, what variable would you add? Why?

Consider the Following Regression Equation for the United States (Standard