construct the demand estimation for soft drink consumption
Demand can be estimated with experimental data, time-series data, or cross-section
data. In this case, cross-section data appear in the Excel file. Soft drink consumption in
cans per capita per year is related to six-pack price, income per capita, and mean
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QUESTIONS
- Given the data, please construct the demand estimation for soft drink consumption in
the United States by
(1) a multiple-linear regression equation (10%), and
(2) a log-linear (exponential) regression equation (10%).
- Given the MS Excel output in Question 1, please compare the two regression
equations’ coefficient of determination (R-square), F-test and t-test. Which equation
is a good (better) fit? Which equation shows the stronger overall significance to
predict the future demand? Which equation will you choose as a better estimation for
quantity demanded? Which equation will you choose as a better estimation for
elasticities? Explain your answer in the language of statistics. (20%)
