Question

To explain personal consumption (CONS) measured in dollars, data is collected for INC: personal income in...

To explain personal consumption (CONS) measured in dollars, data is collected for

INC: personal income in dollars

CRDTLIM: $1 plus the credit limit in dollars available to the individual

APR: average annualized percentage interest rate for borrowing for the individual

ADVT: per person advertising expenditure in dollars by manufacturers in the city where the individual lives

SEX: gender of the individual; 1 if female, 0 if male

A regression analysis was performed with CONS as the dependent variable and ln(CRDTLIM), ln(APR), ln(ADVT), and SEX as the independent variables. The estimated model was y ^ = 2.28 - 0.29 ln(CRDTLIM) + 5.77 ln(APR) + 2.35 ln(ADVT) + 0.39 SEX 1)

Referring to Table 15-1, what is the correct interpretation for the estimated coefficient for ADVT?

A) A 1% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of 2.35% on personal consumption holding other variables constant.

B) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of 2.35% on personal consumption holding other variables constant.

C) A $1 increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of $2.35 on personal consumption holding other variables constant.

D) A 100% increase in per person advertising expenditure by the manufacturer will result in an estimated average increase of $2.35 on personal consumption holding other variables constant

I don't know why this question's answer is D.

I thought the answer is C.

could you explain me about why the answer is D ?

Math   Statistics-And-Probability   
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Answer #1

Sol:

The estimated model was
y ^ = 2.28 - 0.29 ln(CRDTLIM) + 5.77 ln(APR) + 2.35 ln(ADVT) + 0.39 SEX 1)
The correct interpretation for the estimated coefficient of ADVT is that a $1 increase per person advertising expenditure by the manufacturer will result in an estimated average increase of $2.35 on personal consumption, holding other variables constant.

Option  " c" is correct.

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