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HW6-2010 - ENVECON 118 IAS 118 University of California at...

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ENVECON 118 / IAS 118 Elisabeth Sadoulet University of California at Berkeley Fall 2010 Introductory Applied Econometrics Assignment 6 Note: Because of the administrative regulation, the handing in of the assignment is different from usual procedure Must be handed to Andrew in 313 Giannini Hall on Friday December 3 between 12:30pm and 2:30pm or brought to class on Tuesday December 7 between 9:30 and 10 am at the review session in 141 Giannini Hall Exercise 1. Analysis of the demand for organic products This data set APPLE.txt in Wooldridge is an interesting example of experimental data (it can suggest ideas for future projects). They are telephone survey data attempting to elicit the demand for a (fictional) “ecologically friendly” apple. Each family was randomly presented with a set of prices for regular apples and eco-labeled apples. They were asked how many pounds of each kind of apple they would buy. The data set includes the following variables: 2. educ years schooling of respondent 5. regprc price of regular apples ($/lbs) 6. ecoprc price of ecolabeled apples ($/lbs) 8. hhsize household size 9. male =1 if respondent is male 10. faminc family income, thousands $ 11. ecobuy =1 if ecolbs>0 12. reglbs quantity regular apples, lbs 13. ecolbs quantity ecolabeled apples, lbs 14. numlt5 # in household younger than 5 15. num5_17 # in household 5 to 17 16. num18_64 # in household 18 to 64 17. numgt64 # in household older than 64 . sum ecobuy ecolbs reglbs ecoprc regprc faminc Variable | Obs Mean Std. Dev. Min Max -------------+-------------------------------------------------------- ecobuy | 660 .6242424 .4846852 0 1 ecolbs | 660 1.47399 2.525781 0 42 reglbs | 660 1.282323 2.909862 0 42 ecoprc | 660 1.081515 .295573 .59 1.59 regprc | 660 .8827273 .2444687 .59 1.19 faminc | 660 53.40909 35.74122 5 250 I estimated the following four models: I. reg ecolbs faminc regprc ecoprc hhsize male educ Source | SS df MS Number of obs = 660 -------------+------------------------------ F( 6, 653) = 4.59 Model | 170.213972 6 28.3689954 Prob > F = 0.0001 Residual | 4033.92285 653 6.17752351 R-squared = 0.0405 -------------+------------------------------ Adj R-squared = 0.0317 Total | 4204.13682 659 6.3795703 Root MSE = 2.4855 ------------------------------------------------------------------------------ ecolbs | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- faminc | .0022725 .0028706 0.79 0.429 -.0033641 .0079092 regprc | 3.036471 .7147115 4.25 0.000 1.633061 4.439881 ecoprc | -2.888931 .5952459 -4.85 0.000 -4.057757 -1.720104 hhsize | .0537704 .0650184 0.83 0.409 -.0738999 .1814408 male | -.1058233 .2242495 -0.47 0.637 -.5461603 .3345137 educ | .0330106 .0451919 0.73 0.465 -.0557283 .1217496 _cons | 1.191515 .8076929 1.48 0.141 -.3944733 2.777504 ------------------------------------------------------------------------------
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II. reg ecobuy faminc regprc ecoprc hhsize male educ Source | SS df MS Number of obs = 660 -------------+------------------------------ F( 6, 653) = 14.26 Model | 17.92915 6 2.98819166 Prob > F = 0.0000 Residual | 136.882971 653 .209621702 R-squared = 0.1158 -------------+------------------------------ Adj R-squared = 0.1077 Total | 154.812121 659 .234919759 Root MSE = .45784 ------------------------------------------------------------------------------ ecobuy | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- faminc | .0006306 .0005288 1.19 0.233 -.0004077 .0016689 regprc | .7424334 .1316563 5.64 0.000
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