chap07 - CHAPTER 7 Exercise Answers EXERCISE 7.2 (a)...

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36 CHAPTER 7 Exercise Answers EXERCISE 7.2 (a) Intercept : At the beginning of the time period over which observations were taken, on a day which is not Friday, Saturday or a holiday, and a day which has neither a full moon nor a half moon, the estimated average number of emergency room cases was 93.69. T : We estimate that the average number of emergency room cases has been increasing by 0.0338 per day, other factors held constant. The t -value is 3.06 and p -value = 0.003 < 0.01. HOLIDAY : The average number of emergency room cases is estimated to go up by 13.86 on holidays, holding all else constant. The “holiday effect” is significant at the 0.05 level. FRI and SAT : The average number of emergency room cases is estimated to go up by 6.9 and 10.6 on Fridays and Saturdays, respectively, holding all else constant. These estimated coefficients are both significant at the 0.01 level. FULLMOON : The average number of emergency room cases is estimated to go up by 2.45 on days when there is a full moon, all else constant. However, a null hypothesis stating that a full moon has no influence on the number of emergency room cases would not be rejected at any reasonable level of significance. NEWMOON : The average number of emergency room cases is estimated to go up by 6.4 on days when there is a new moon, all else held constant. However, a null hypothesis stating that a new moon has no influence on the number of emergency room cases would not be rejected at the usual 10% level, or smaller. (b) There are very small changes in the remaining coefficients, and their standard errors, when FULLMOON and NEWMOON are omitted. (c) Testing 06 7 :0 H  against 16 7 : or is nonzero H , we find 1.29 F . The 0.05 critical value is (0.95, 2, 222) 3.307 F , and corresponding p -value is 0.277. Thus, we do not reject the null hypothesis that new and full moons have no impact on the number of emergency room cases.
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Chapter 7, Exercise Answers, Principles of Econometrics, 4e 37 EXERCISE 7.5 (a) The estimated equation, with standard errors in parentheses, is  ln 4.4638 0.3334 0.03596 0.003428 (se) 0.0264 0.0359 0.00104 0.001414 PRICE UTOWN SQFT SQFT UTOWN  2 0.000904 0.01899 0.006556 0.8619 0.000218 0.00510 0.004140 AGE POOL FPLACE R  (b) Using this result for the coefficients of SQFT and AGE , we estimate that an additional 100 square feet of floor space is estimated to increase price by 3.6% for a house not in University town and 3.25% for a house in University town, holding all else fixed. A house which is a year older is estimated to sell for 0.0904% less, holding all else constant. The estimated coefficients of UTOWN , AGE , and the slope-indicator variable SQFT_UTOWN are significantly different from zero at the 5% level of significance. (c) An approximation of the percentage change in price due to the presence of a pool is 1.90%. The exact percentage change in price due to the presence of a pool is estimated to be 1.92%.
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This note was uploaded on 03/18/2011 for the course ECON 101 taught by Professor Leif during the Winter '10 term at Accreditation Commission for Acupuncture and Oriental Medicine.

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chap07 - CHAPTER 7 Exercise Answers EXERCISE 7.2 (a)...

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