ECON 351 Chapter 11: chap11.pdf
22 Mar 2014
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The estimated price elasticity of demand at the mean is. The figure below is a sketch of the supply and demand equations using the estimates from part (b) and the given exogenous variable values. The estimated equilibrium values from part (d) are. Using the reduced form estimates in tables 11. 2a and 11. 2b, the predicted equilibrium values are. The sign for the coefficient of q is incorrect because it suggests that there is a positive relationship between price and quantity demanded. All estimates in this supply equation are significantly different from zero. All coefficient signs are correct, and the coefficient values do not differ much from the estimates in part (b). The summary statistics are presented in the following table. On average, women who work are younger, have fewer children under the age of 6 and have a higher family income. Also, the standard deviation across all variables is smaller for working women.
