Explain what each of the estimated coefficients

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Reference no: EM13159778

The equation below estimates the demand for alcoholic beverages in the United Kingdom using annual data for 20 years (n=20). The estimated equation takes the following form (t-statistics in parenthesis):

Qt = - .014 - .354X2t + .0018X3t + .357X4t + .0059X5t
(1.16) (2.86) (3.39) (2.47) (1.73)

Where:

Q = the annual change in alcohol consumption
X2 = the annual change in the price of alcoholic drinks
X3 = the annual change in disposable income
X4 = the annual change in the number of licensed premises/adult population
X5 = the annual change in advertising expenditure on alcoholic drinks per adult

a. Are the estimated signs of the regression coefficients consistent with economic theory (ie. just common sense)? Explain.

b. Explain what each of the estimated coefficients means that is interpret the results. Explain.

c. Are each of the estimated coefficients statistically significant at the 5% level of significance? Explain Completely.

d. Interpret the coefficient of determination, R2.

Reference no: EM13159778

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