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Multiple Regression

Multiple Regression. Estimated Demand Elasticities by 2 Methods H. Schultz (1933). “A Comparison of Elasticities of Demand by Different Methods,” Econometrica , Vol. 1, #3, pp. 274-308. H. Schultz(1925). “Appendix 2,” Journal of Political Economy , Vol. 33, #6, pp. 634-637. .

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Multiple Regression

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  1. Multiple Regression Estimated Demand Elasticities by 2 Methods H. Schultz (1933). “A Comparison of Elasticities of Demand by Different Methods,” Econometrica, Vol. 1, #3, pp. 274-308. H. Schultz(1925). “Appendix 2,” Journal of Political Economy, Vol. 33, #6, pp. 634-637.

  2. Data Description and Models • Data: U.S. Sugar Consumption and Prices:Years 1896-1914 • Dependent Variable: Consumption per Capita (Q, lbs) • Independent Variables: • Real Price (BLS adjusted 1913=100, all commodities) • Year (t, year – 1905) • Models: Linear and Nonlinear (Intrinsically Linear):

  3. Data Note: Sugar is in 1000s of Tons, Pop is in Millions  Q = 2*Sugar/Pop

  4. Elasticity of Demand

  5. Effects of Time Shift (Ignoring Error terms)

  6. Regression Results – Model 1

  7. Regression Results – Model 2

  8. Estimated Elasticities of Demand and Q/t Model 1: Model 2:

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