Assignment 5 - Hridai Madhukar

C 4.1)iii)
A’s expenditure increases the voteA and a ect the outcome while B’s
expenditure reduces voteA.
The estimates imply that a 10% ceteris paribus increase in spending by
candidate A increases the predicted share of the vote going to A by
about .61 percentage points. Similarly, a 10% ceteris paribus increase
in spending by B reduces voteA by about .66 percentage points. These
e ects certainly cannot be ignored. The coe cients on log(expendA)
and log(expendB) are of opposite in sign. Hence there will be a need to
test the hypothesis from part (ii).
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iv) The t value is showing as -1 which is within the critical region so we
fail to reject the null hypothesis.

C4.8)
i) There are 2017 single person households in the data set.
ii) nettfa = -43.03 + 0.799inc + 0.842age
The surprise in the slope estimates is that age has a higher coe cient
than income which means it has a larger e ect on the net nancial
wealth than the family income of a survey respondent.

iii) The intercept has an interesting meaning as it is negative which

shows that one with 0 family income and a lower age will have a
negative net worth.
iv) the p value of the test is 0.079 which is higher than the critical value
at the 5 percent level.
Therefore, we fail to reject the null hypothesis.

V) in the regression of nettfa on inc, we get the coe cient as 0.82.

This is more than the coe cient in the multi linear regression. This is
because beta2<1.
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