TABLE 14-14 An Econometrician Is Interested in Evaluating the Relation of Demand

question 184

Short Answer

TABLE 14-14
An econometrician is interested in evaluating the relation of demand for building materials to mortgage rates in Los Angeles and San Francisco. He believes that the appropriate model is
Y = 10 + 5X₁ + 8X₂
where X₁ = mortgage rate in %
X₂ = 1 if SF, 0 if LA
Y = demand in $100 per capita
-Referring to Table 14-14, the predicted demand in San Francisco when the mortgage rate is 10% is _____.

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