Unformatted text preview: demand for co/ee is estimated to be 4.216. When the price of co/ee increases by one unit holding the price of tea constant, the expected demand for co/ee is estiamted to decrease by 0.95 units. When the price of tea increases by one unit holding the price of co/ee constant, the expected demand for tea is estimated to increase by 0.877 units. (b) N = 1995 & 1971 + 1 = 25 . For Regression (12), & R 2 = 1 & (1 & : 875)(25 & 1) = (25 & 1 & 1) = 0 : 8696 . For Regression (13), & R 2 = 1 & (1 & : 877)(25 & 1) = (25 & 2 & 1) = 0 : 8656 . Besed on & R 2 , we prefer teh regression with a higher & R 2 . So we prefer regression (12). 1...
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 Fall '07
 OGAKI
 Econometrics, Harshad number, co¤ee

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