Cigarette demand in-class exercise

Cigarette demand in-class exercise -...

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This exercise concerns regressions used to estimate the demand for cigarettes. The unit of observation is the state. Variables are observed in the 48 continuous US states for two years, 1985 and 1995. The variables are: PACKPC = Annual per-capita cigarette consumption by state and year, in packs per person. RAVGPRS = Real ($1995) average price per pack by state and year (in cents). RPCINC = Real ($1995) per capita income by state and year (in thousands dollars per person) Descriptive statistics for the variables follow. =============================================================================== Variable Mean Std.Dev. Minimum Maximum Cases Missing =============================================================================== ------------------------------------------------------------------------------ All observations in current sample ------------------------------------------------------------------------------ PACKPC | 109.182 25.8713 49.2722 197.994 96 0 RAVGPRS | 165.025 26.4629 120.345 240.850 96 0 RPCINC | 21.0531 3.26099 14.0533 31.9466 96 0 The estimated regression is: m 22 208.693 0.796( ) 1.513( ), 18.22, (2, 93) 49.23, (13.421) (0.0880) (.7140) .514, .504 PACKPC RAVGPRS RPCINC SER F RR =− + = = == A. Interpret the estimated regression. 1. What proportion of variation in the per capita cigarette consumption is explained by variation in cigarette prices and per capita income?
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Cigarette demand in-class exercise -...

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