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

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 effect of living in San Francisco rather than Los Angeles is to increase the mean demand by an estimated ________.