are106-midterm-2-sample-answers - ARE 106 Fall 2008 SAMPLE...

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ARE 106 Fall 2008 SAMPLE ANSWERS FOR MIDTERM 2 MEAGAN MORROW DAVID KLING Disclaimer: These solutions were not provided by Dr. Havenner and do not represent an "official" answer key. 1. In problem I, we're asked to consider a data set containing the following variables from a cross sectional data set from 1988, drawn from 40 cities in the United States. TABLE 1. Variable Names and Definitions for Problem 1 Variable BUSTRAVLMIL FARE GASPRICE DENSITY LANDAREA Definition Demand for urban transponation by bus in millions of passenger hours. Bus fare in dollars. Price of a gallon of gasoline in dollars. Density of cily in persons/miles 2 . Land area of Ihe city in miles 2 Minimum Value (nol given) 0.5 0.79 1,551 18.9 Maximum Value (nol given) 1.5 1.03 24.288 556.4 We're also given the following regression output Modell: OLS estimates using the 40 observations 1-40 Dependent variable: BUSTRAVLMIL coefficient std. error t-ratio p-value const -5.19 3.92 FARE -0.67 0.759 GASPRICE 3.67 4.462 DENSITY 0.00042 0.00005 LANDAREA 0.00957 0.0016 -1.324 0.19 -0.856 0.4 0.823 0.42 8.239 1.04E-09 *** 5.823 1.32E-06 *** Mean of dependent variable = 1.93
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