Reference no: EM132473025

1. Sherwin-Williams Company is attempting to develop a demand model for its line of exterior house paints. The company's chief economist feels that the most important variables affecting paint sales (y) (measured in thousand gallons) are

• Promotional expenditure (a) (measured in thousand dollars)
• Selling price (p) (measured in dollars per gallon)
• Disposable income per household (m) (measured in thousand dollars).

Using the variables specified by the Company's chief economist, the Research Department obtained from a data set of thirty observations the following estimation result of a log-linear regression model given by.

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|      Coefficient     Std. Err.       t        P>|t|   [95% Conf. Interval]

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|       -.0232291   .1420415   -0.16    0.875   -.3707923    .324334

|      -1.037375    .3655166   -2.84    0.030   -1.931762  -.1429884

|       .3882373   .3753380    1.03     0.341   -.5301816   1.306656

constant |  6.951867   1.442853     4.82    0.003    3.421333    10.4824

First conduct an appropriate t-test for each independent variable except the constant as to whether it is statistically significant at the 95% confidence level, and then make an economic interpretation of each of the statistically significant coefficients.