OBJECTIVES OF THE STUDY

The main objective of the study is to analyze the data on water consumption that has been
collected. From the data we can identify the dependent variable and independent variable. The
dependent variable is water consumption and the independent variable are GNP (in billion per
liter), water prices (in sen per liter) and income (in thousands per year) .Then, we use the TSP
software to calculate the regression result which is coefficient, standard deviation and T-statistic.
After that, the result will interpret one by one. So, from the result we can write down the demand
function for the water consumption.

CONCLUDING REMARKS

 R² is accepted because R² high which is 0.97% @ 97%

 T- statistic accepted because most of the independent variable are significant.

 F- statistic accepted because it significant which is F – stat > 4.7571

 Dubin Watson 1.040804.

DATA COLLECTION

Data on water consumption (in billion of litre), GNP (in billions of ringgit Malaysia), and water
prices (in sen per liter) and income (in thousand per year) for the period 1981 – 1990 are shown
below:

Year Consumption GNP Price Income

(RM) (RM) (RM)

1981 407.9 944.0 2.09 12

1982 447.8 992.7 2.10 14

1983 479.1 1077.6 2.19 15

1984 511.4 1185.9 2.29 16

1985 554.2 1326.4 2.38 13

1986 555.0 1434.2 2.83 14

1987 586.1 1594.2 3.21 13

1988 613.1 1718.0 3.45 14

1989 652.3 1918.3 3.78 15

1990 679.2 2163.9 4.03 13