ProblemSet_4_08C solutions

ProblemSet_4_08C solutions - ESM 206 Problem Set 4...

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ESM 206 Problem Set 4 Solutions Logistic regression A. See slides from lecture B. 1. The most important factor would probably be price, although it might enter in two ways: absolute price, and the price premium (the difference in price between eco and regular apples). I would also expect that the presence of children in the family would make them more likely to buy the ecoapples, out of health concerns. I expect that families with higher incomes would be more likely to buy the apples if they are more expensive. People living in states with high apple production (e.g., Washington or New York) might be more interested in the potential environmental benefits, as would people with stronger environmental attitudes. Finally, if people are concerned that ecoapples might not store as well as conventional apples, they might be more likely to buy them when apples are in season. 2. The dataset contains the absolute price that the eco-apples were offered at, and the premium can be calculated by subtracting the offered price of regular apples. There is information on the number of both young (<5) and older children in the family. Income data is included. State is given; most apples are grown in New York, Pennsylvania, Michigan, Washington, and California (data from http://www.usapple.org/industry/applestats/outlook2005/index.cfm ), so I can create a dummy variable that is 1 for people from those states and zero otherwise. There is no information on environmental attitudes. There is a variable which indicates whether the interview took place when apples were in season. Calculating the price premium in R:

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Calculating the variable AppleState (major apple-producing state) in R. The full formula is state=="NY" | state=="PA" | state=="MI" | state=="WA" | state=="CA" The vertical bar is a logical “or”. The resulting variable is “true” and “false”; R treats this like one and zero in the analysis. 3.
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ProblemSet_4_08C solutions - ESM 206 Problem Set 4...

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