Question

The following results are contained in a study of U.S. lamb demand conducted by Ted Schroeder and associates at Kansas State University. The sample consisted of quarterly data from 1978-1999. (N = 88). The price data was in cents per pound, the lamb consumption data was in pounds per capita, and the disposable income was in dollars per capita. The model also included dummy variables for each quarter (Q2, Q3, and Q4) with the first quarter (Q1) as the omitted dummy variable. The first quarter consists of the

months of January, February, and March

E What is the interpretation of the coefficient estimate on the variable Chicken Price?

F. What is the interpretation of the coefficient estimate on the variable

Q3DUM?

Variable	Coefficient Estimate	Standard Error
Constant	0.67900	0.13200
Lamb Price	-0.00076	0.00013
Beef Price	0.00052	0.00020
Pork Price	0.00022	0.00019
Chicken Price	-0.00014	0.00046
Income	-0.00009	0.00004
Q2DUM	-0.03680	0.01000
Q3DUM	-0.04390	0.01000
Q4DUM	-0.02380	0.01000

Answer 1

E What is the interpretation of the coefficient estimate on the variable Chicken Price?

we see that the chicken price has a coefficient of -0.00014 , this means that for every unit increase in the value of the chicken price , the demand would go down by 0.00014 units

F. What is the interpretation of the coefficient estimate on the variable
Q3DUM?

we see that the coefficient of the dummy variable is -0.04390 , this means that if the during the month of march the value of demand would go down by 0.04390 units as oppose to january and february