ࡱ> $&# ; bjbj "jj;l  3          $         v   vvv "   v  vvzV @  0; @R,".  03 : xN( vPRINCPLES OF ECONOMICS LAB MULTIPLE REGRESSION OBJECTIVES: The purpose of this lab is to familiarize the student with multiple regression using Excel. The student will be introduced to significance of coefficients and goodness of fit. Using the data in the file MREGLAB.XLS run the following regression: Regress Per capita consumption (CONS) against a constant term and price (PRICE). Write out the equation with the coefficients from your computer output. Which of the variables are significant? Why? Does the law of demand hold? Why? What is the value of the R-Square stat? What does this mean? Interpret the value of the coefficient of price in words. Using the data in the file MREGLAB.XLS run the following regression: Regress Per capita consumption (CONS) against a constant term, price (PRICE), per capita income (INC) and advertising (ADVERT). Which of the variables are significant? Why? Does the law of demand hold? Why? Are cigarettes an inferior good? Why? According to your results increases in advertising lead to a drop in sales. Yet cigarette companies advertise. Use a quadratic specification for advertising to explain this behavior. In other words run a regression that contains all of the variables from (a) and advertising squared. Based on the signs of your regression coefficients draw a graph with sales on the vertical axis and advertising on the horizontal axis. What is the value of the R-Square stat? What does this mean? You suspect that cigarettes may be an addictive good. Run a regression to test this hypothesis? What do your results suggest? 2=; 5\126\]z 7 8 9 : ;  & F & F;  1h/ =!"#$% i8@8 NormalCJ_HaJmH sH tH <A@< Default Paragraph Font*>@* Title$a$5\;126\]z789:=0000 0 0 0 0 0 00 0 0 0 0 0 0 0 00000; ; ; =\=30]9:=Colorado College'H:\Prin Lab\Multiple Regression Lab.docColorado CollegepC:\Documents and Settings\afenn\Application Data\Microsoft\Word\AutoRecovery save of Multiple Regression Lab.asdColorado College2H:\Prin Lab\REGRESSION\Multiple Regression Lab.docLv:1t=н  t7zJhhh^h`.h88^8`.hL^`L.h  ^ `.h  ^ `.hxLx^x`L.hHH^H`.h^`.hL^`L.h88^8`.h^`.h L ^ `L.h  ^ `.hxx^x`.hHLH^H`L.h^`.h^`.hL^`L.h^`.^`.pLp^p`L.@ @ ^@ `.^`.L^`L.^`.^`.PLP^P`L. t7Lt=                           @ԝy;P@UnknownGz Times New Roman5Symbol3& z Arial"1hwF7w# !0N 2Q0PRINCPLES OF ECONOMICS LAB  MULTIPLE REGRESSIONColorado CollegeColorado CollegeOh+'0( DP l x 1PRINCPLES OF ECONOMICS LAB MULTIPLE REGRESSIONMRINOMIoloolo Normal.dotlOMI6loMicrosoft Word 9.0I@xA@D`mP@Z?R#՜.+,0( hp  E N 1PRINCPLES OF ECONOMICS LAB MULTIPLE REGRESSION Title  !"%Root Entry F@R'1Table WordDocument"SummaryInformation(DocumentSummaryInformation8CompObjjObjectPool@R@R  FMicrosoft Word Document MSWordDocWord.Document.89q