04.

Regression Model

log TRUS,SL= -287.41205 – 1.48406 log GDPUS – 0.7403287 log GDPSL- 0 log DSC,Sl
+ 19.265038 log POPUS - 0.2665711 log POPSL

Regarding the interpretation, it must be aware that the data considered here about the
trade balances between US and Sri Lanka are negative values because there is deficit
of trade balances between US and SL and when taking the log values of trade
balances between US and Sri Lanka the minus mark has neglected. Therefore, when
interpreting the regression model, all the independent values are effect for the
dependent value of deficit trade balance between US and Sri Lanka (TRUS,SL).
According to the analyzed data of United States and Sri Lankan Trade, based on the
regression model it can be interpret as, when the US and Sri Lankan GDP, Distance
and Populations are 0, the US and Sri Lankan deficit trade can be remained at minus
287.41205. When the US GDP is increasing by one percent, and other factors are
remaining the same, the US and Sri Lankan deficit of trade balance can be reduced by
1.48406 percent. When the SL GDP is increasing by one percent, and other factors are
remaining the same, the US and Sri Lankan deficit of trade balance can be reduced by
0.7403287 percent. When the distance between US and SL is increasing by one
percent, and other factors are remaining the same, the US and Sri Lankan deficit of
trade balance is affected by 0 percent. When the SL population is increasing by one
percent, and other factors are remaining the same, the US and Sri Lankan deficit of
trade balance can be increased by 19.265038 percent. When the US population is
increasing by one percent, and other factors are remaining the same, the US and Sri
Lankan deficit of trade balance can be reduced by 0.2665711 percent.