Figure

(Continued )

16See Chandan Mukherjee, Howard White, and Marc Wuyts, Econometrics and Data Analysis for Developing Countries, Routledge, London, 1998, p. 158. This quote is attributed to H. Working, "Statistical Laws of Family Expenditure," Journal of the American Statistical Association, vol. 38, 1943, pp. 43-56.

CHAPTER SIX: EXTENSIONS OF THE TWO-VARIABLE LINEAR REGRESSION MODEL 183

AN ILLUSTRATIVE EXAMPLE (Continued)

Interpreted in the manner described earlier, the slope coefficient of about 257 means that an increase in the total food expenditure of 1 percent, on average, leads to about 2.57 rupees increase in the expenditure on food of the 55 families included in the sample. (Note: We have divided the estimated slope coefficient by 100.)

Before proceeding further, note that if you want to compute the elasticity coefficient for the log—lin or lin—log models, you can do so from the definition of the elasticity coefficient given before, namely,

Elasticity = d^Y

As a matter of fact, once the functional form of a model is known, one can compute elasticities by applying the preceding definition. (Table 6.6, given later, summarizes the elasticity coefficients for the various models.)

Was this article helpful?

0 0
Rules Of The Rich And Wealthy

Rules Of The Rich And Wealthy

Learning About The Rules Of The Rich And Wealthy Can Have Amazing Benefits For Your Life And Success. Discover the hidden rules and beat the rich at their own game. The general population has a love / hate kinship with riches. They resent those who have it, but spend their total lives attempting to get it for themselves. The reason an immense majority of individuals never accumulate a substantial savings is because they don't comprehend the nature of money or how it works.

Get My Free Ebook


Post a comment