ECON 351 Chapter 5: chap05.pdf
22 Mar 2014
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1 (b) (c) (d) (e) (f) (g) (h) 2 (0. 3233, 1. 3017) (b) we do not reject. 0. 0001 suggests that as ln totexp increases by 1 unit the budget. The value proportion for transport increases by 0. 0414. Alternatively, one can say that a 10% increase in total expenditure will increase the budget proportion for transportation by. 3b is not year the budget share for transport decreases by 0. 0001. For a given level of total expenditure and a given number of children, it is difficult to predict the effect of age on transport share. The value implies that an additional child decreases the budget share for transport by 0. 013. The negative sign means that adding children to a household increases expenditure on other items (such as food and clothing) more than it does on transportation. Alternatively, having more children may lead a household to turn to cheaper forms of transport.
