TABLE 13-13 An Econometrician Is Interested in Evaluating the Relationship of Demand

Short Answer

TABLE 13-13
An econometrician is interested in evaluating the relationship 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 13-13, the effect of living in San Francisco rather than Los Angeles is to increase the mean demand by an estimated ________ per capita.