5 The Following Table Shows The Results Of A Regression That Estimates The Travelling Distance Of Malaysian Families Wh 1 (67.29 KiB) Viewed 11 times
5 The Following Table Shows The Results Of A Regression That Estimates The Travelling Distance Of Malaysian Families Wh 2 (38.19 KiB) Viewed 11 times
5. The following table shows the results of a regression that estimates the travelling distance of Malaysian families when they take vacation. Model 1: OLS, using observations 1-194 Dependent variable: 1 kilometres Variables const 1 income age kids Coefficient Std. Error 0.0786 0.6949 0.9595 0.1215 -0.0795 0.0172 -0.0942 0.0315 t-ratio 0.1132 7.8969 -4.6221 -2.9874 p-value 0.9100 <0.0001 <0.0001 0.0032 0.6371 0.5106 0.3576 0.0000 Mean dependent var 6.8354 S.D. dependent var Sum squared residuals 49.5404 S.E. of regression R-squared 0.3676 Adjusted R-squared F(3, 190) 36.8189 P-valuc(F) The variables are defined as follows: • 'l kilometres' - logarithm of travelling distance in kilometres, • Lincome' -logarithm of family annual income (in RM 1000), • 'age' -the average age of adult members of household, • kids'-number of children in household. (a) Explain the rationales for transforming distance and income variables into logarithmic format. [5 marks] (b) Interpret the estimated coefficient of 'l_income'. [6 marks] (c) Interpret the estimated coefficient of age'. [6 marks]
(d) Test, at the 1% significance level, whether households with younger adult members travel more distance when they take vacation. State your null and alternative hypothesis clearly. [5 marks] (e) The researcher suspects that the variance of travelling distance is likely to vary with the level of family annual income. If it was the case, which OLS assumption would be violated and what are the consequences of it? [7 marks] (0) Explain how you would conduct a formal statistical test for the violation of OLS assumption you identified in (e). State the null and alternative hypotheses of the test clearly. (6). State the
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