How would modify the model to capture the effect

Assignment Help Econometrics

Reference no: EM13206133

Consider the log-linear model
0 1 1 2 2 ln(Y) β0+ β1X1+ β2X2 + u
Suppose you think that the value of β2 (the effect of X2) was not constant, but rather increased when X1 increased.

(a) How would you modify the model to capture this effect?

(b) How would you test the null hypothesis that the value of β2(effect of X2) is constant against the alternative hypothesis that the value of β2(effect of X2) increased when X1 increased

Reference no: EM13206133

Questions Cloud

Find the probability that all of them are acceptable : In one town, 51 percent of all voters are democrats If two voters are randomly selected for a survey, find the probability that they are both democrats.

Determine the dimensions of the corral : If the perimeter fence costs $5 per yard and the fence down the middle costs $3 per yard, determine the dimensions of the corral so that the fencing cost will be as small as possible.

Explain why organizational psychology : Explain why industrial/organizational psychology should be considered a science. Are there any potential objections or barriers?

Write the equation for the hyperbola : Write the equation for the hyperbola whose vertices are located at (3, 1) and (3, 5) and foci at (3, 7.5) and (3, -1.5).

How would modify the model to capture the effect : How would you modify the model to capture this effect. How would you test the null hypothesis that the value of β2(effect of X2) is constant against the alternative hypothesis that the value of β2(effect of X2) increased when X1 increased.

Purpose of deciding important bills by a committee of whole : The purpose of deciding important bills by a committee of the whole is to

Find an expression for x in terms of t : Initially, the depth of water in a tank is 32m . Water drains from the tank through a hole cut in the bottom. At t minutes the water begins drainning, the depth of water in the tank is x metres. The water level changes at a rate equal to (-2t-4).

High-risk mothers and infants-chronically ill and disabled : High-risk mothers and infants, Chronically ill and disabled, Persons living with HIV/AIDS, Mentally Ill and Disabled

Explain the ph of the solution in the cathode compartment : What is the pH of the solution in the cathode compartment of the following cell if the measured cell potential

User Account

All Pages