Question: The factors that affect the demand for new passenger cars in the U.S. are given; From these data answer the following questions.
Q1. Estimate the demand equation for new cars of the form
Y = a +b1X1 + b2X2 + b3X3 + b4X4
Q2. With the use of a graph, compare the estimated demand Y' based on the above equation with the actual data. Graph both the actual and the estimated demand
Q3. Assess the goodness of fit of between the actual and the estimated demand
Q4. State the specific effects of each independent variable on the demand for automobile
Q5. Identify the significant variables using the t test. Use the 5% level of sginificance.
|
|
|
The Annual Demand for Passenger Cars in the United States |
|
X1 |
X2 |
X3 |
X4 |
Y |
Yest. |
|
|
|
|
|
|
|
New Cars |
|
|
|
| Years |
CPI |
DPI |
INT |
EMP |
Sold |
|
|
|
| 1971 |
121.3 |
776.8 |
4.89 |
79367 |
10227 |
9819.8591 |
|
|
| 1972 |
125.3 |
839.6 |
4.55 |
82153 |
10872 |
10361.911 |
|
|
| 1973 |
133.1 |
949.8 |
7.38 |
85064 |
11350 |
10499.428 |
|
|
| 1974 |
147.7 |
1038.4 |
8.61 |
86794 |
8775 |
9981.0769 |
|
|
| 1975 |
161.2 |
1142.8 |
6.16 |
85846 |
8539 |
9767.1884 |
|
|
| 1976 |
170.5 |
1252.6 |
5.22 |
88762 |
9994 |
10289.364 |
|
|
| 1977 |
181.5 |
1379.3 |
5.5 |
92017 |
11046 |
10669.624 |
|
|
| 1978 |
195.4 |
1551.2 |
7.78 |
96048 |
11164 |
10956.784 |
|
|
| 1979 |
217.4 |
1729.3 |
10.25 |
98824 |
10559 |
10414.811 |
|
|
| 1980 |
246.6 |
1918 |
11.28 |
99303 |
8979 |
9215.8902 |
|
|
| 1981 |
272.4 |
2127.6 |
13.73 |
100397 |
8535 |
8332.1567 |
|
|
| 1982 |
289.1 |
2261.4 |
11.2 |
99526 |
7980 |
8074.746 |
|
|
| 1983 |
298.4 |
2428.1 |
8.69 |
100834 |
9179 |
8955.9761 |
|
|
| 1984 |
311.1 |
2670.6 |
9.65 |
105005 |
10394 |
10011.598 |
|
|
| 1985 |
322.2 |
2841.1 |
7.75 |
107150 |
11039 |
10809.848 |
|
|
| 1986 |
328.4 |
3022.1 |
6.31 |
109597 |
11450 |
12060.893 |
|
|
X1 = consmer price index in percent
X2 = disposable personal income in bil dols.
X3 = interest rate in percent
X4 = employment in 100
Y = no of new cars sold in 1000
Y' = estimate of new cars sold based on demand function