Consumption= Monthly consumption per thousand rupees

Income= Monthly income per thousand rupees

I=a+bx (i)
Consumption= a+bincome (ii)
Data transformed into logarithm form (ln)
lnc=a+lnI ( log linear model)
Where, c= consumption
I= income
a= constant
b= slope and parameter
c= -.172+.181I (iii)
c=-1.561+.949I

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -.172 .803 -.215 .833
I .181 .016 .937 11.394 .000
a. Dependent Variable: C
When change in income by Rs.1000. change in consumption by Rs.181.
H0=null hypothesis, b=0(there is no relationship between income and consumption)
H1=alternative hypothesis, b≠0(there is a significance relationship between income and
consumption)
Conclusion: All statistical values are positive and significance about 99% confidence level and
thus, the alternative hypothesis is accepted, this means that if change in income obviously change
in consumption. In other words, when change in their income people buy more.

When change in income by 1% change in consumption by about 95%.

H0=null hypothesis, b=0(there is no relationship between income and consumption)
H1=alternative hypothesis, b≠0(there is a significance relationship between income and
consumption)
Conclusion: All statistical values are positive and significance about 99% confidence level and
thus, the alternative hypothesis is accepted, this means that if change in income obviously change
in consumption. In other words, when change in their income most of their income goes to
consumption.