28 - votes The coefficient 53.496 suggest that on average...

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Chapter 2, Exercise Solutions, Principles of Econometrics, 3e 28 Exercise 2.14 (continued) (c) Figure xr2.14(c) shows a plot of VOTE against INFLATION . It shows a negative correlation between the two variables. The estimated equation is: n 53.496 0.445 VOTE = INFLATION The coefficient 0.445 indicates that a 1% increase in inflation, the GDP deflator, during the incumbent party’s first 15 quarters, is associated with a 0.445 drop in the share of
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Unformatted text preview: votes. The coefficient 53.496 suggest that on average, when inflation is at 0% for that party’s first 15 quarters, the associated share of votes won by the incumbent party is 53.496%; the incumbent party maintains the majority vote when inflation, during their first 15 quarters, is at 0%. 35 40 45 50 55 60 65 1 2 3 4 5 6 7 8 INFLATION VOTE Figure xr2.14(c) Graph of vote-inflation regression line and observations...
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This note was uploaded on 11/23/2011 for the course ECON MPBE taught by Professor Jansveceny during the Spring '11 term at Metropolitní Univerzita Praha.

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