MGE 302 Study Guide - Midterm Guide: Linear Form, Response Bias, Inferior Good
8 Apr 2019
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Linear demand regression estimate: significance is shown by p-value (the probability that the true parameter equals zero) a p-value < . 01 means it is less than 1% probability of not being significant (= zero) Nonlinear empirical demand specification log-linear form: convert to logarithms, elasticities are constant in this form. Demand for a price-setter: specify price-setting firm"s demand function, collect data for variables in firm"s demand function, estimate firm"s demand. Time series forecasts time-ordered sequence of observations on a variable generated: simplest form- linear trend forecasting, sales (qt) linearly related to time (t, use regression analysis to estimate values of a and b. If b > 0, sales are increasing over time. If b < 0, sales are decreasing over time. If b = 0, sales are constant over time: statistical significance of a trend is, determined by testing or by examining the p-value for.
