Introductory econometrics assignment. The reasons for creating these two relative price variables is to demonstrate the impact of relative price changes of no.2 and no.3 canned tuna to the unit sales of brand no.1 canned tuna. As a result of that no.2 an
INTRODUCTORY ECONOMETRICS ASSIGNMENT PART 1 a. By using 'Genr' function from eview, to generate two new relative price variables: RPRICE 2 = APR1/APR2 and RPRICE3 = APR1 / APR3. The reasons for creating these two relative price variables is to demonstrate the impact of relative price changes of no.2 and no.3 canned tuna to the unit sales of brand no.1 canned tuna. As a result of that no.2 and no.3 canned tuna are the substitute goods of no.1 canned tuna. Dependent Variable: LOG(SAL1) Method: Least Squares Date: 10/20/11 Time: 23:05 Sample: 1 52 Included observations: 52 Variable Coefficient Std. Error t-Statistic Prob. C 0.27575 0.518528 9.81716 0.0000 RPRICE2 -1.858067 0.513899 -3.615630 0.0007 R-squared 0.207265 Mean dependent var 8.437187 Adjusted R-squared 0.191410 S.D. dependent var 0.813654 S.E. of regression 0.731651 Akaike info criterion 2.250676 Sum squared resid 26.76564 Schwarz criterion 2.325723 Log likelihood -56.51756 Hannan-Quinn criter. 2.279447 F-statistic 3.07278 Durbin-Watson stat .353070 Prob(F-statistic) 0.000696 b. The table above shows the result of estimate function: . is equalled to -1.858067, which means one unit change in RPRICE2 or the relative price change of no.1 and no.2 canned tuna will result in -1.858067 % change in SAL1 or unit sale of no.1 canned tuna. Also, the 95% confidence