This preview shows page 1. Sign up to view the full content.
Unformatted text preview: s you’ll see in ECO 220, one can estimate the parameters , , , by collecting data on ,
a regression of on , , , by minimizing the sum of squared errors:
, ,, ∑ ∑( , ,, and running ) In ECO 204, you are not responsible for the algebra of estimating the parameters , , , but you are responsible
for estimating these parameters by using Excel. Let’s illustrate demand models derived from regression analysis by two
Suppose we want to estimate a simple economic demand model of the form:
The regression (econometric) model is:
We haven’t specified the functional form of ( ): is it linear, quadratic, etc.? Typically, business analysts proceed by
collecting data on and such as the data in following table containing a “snapshot” of a supermarket scanner data set
for two brands of “diet” sodas X and Y, sold in seven stores (“62” through “68”) of a supermarket over 52 weeks (“101”
through “152”): 4 We have seen regression analysis before in the “short run CMP” chapter.
8 ECO 20...
View Full Document
This document was uploaded on 01/19/2014.
- Fall '14
- The Land