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QuestionsPract1

QuestionsPract1 - Consumer Demand Question 3 The...

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Consumer Demand Question 3. The Mega-lo-mart supermarket chain has data on the monthly purchases made by all its storecard holders over the past two years. Besides the variation across customers in total spending in Mega-lo-mart stores, there is also variation over time in prices driven particularly by special offers and seasonal variation. Their research department wishes to use the data to learn about demand for its merchandise. It pools all the data and runs the following regressions. lnQM lnQV lnQB Constant 1.46 (6.41) 3.82 (4.41) 2.26 (7.34) ln pM -0.76 (2.25) -0.47 (1.88) 0.35 (0.58) ln pV -0.39 (0.58) -1.43 (1.77) 0.11 (0.04) ln pB 1.12 (2.11) 0.96 (1.53) -0.24 (0.95) ln x 1.32 (4.78) 0.66 (3.32) 0.95 (7.12) DDec 0.62 (2.17) 0.12 (1.32) 0.35 (3.83) R – squared 0.57 0.42 0.31 Sample size 3761 4015 4013 Here x is total spending in Mega-lo-mart stores, QM, QV and QB are quantities of meat, vegetables and bakery produce, pM, pV and pB are the associated prices, and DDec is a variable taking the value one if the observation is in December and zero otherwise. Figures in parentheses are absolute t values.
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