question archive 1) (70 points) Suppose we write down the following model for the final price of iPod auctions on eBay: PRICE, = Po + 1
1) (70 points) Suppose we write down the following model for the final price of iPod auctions on eBay: PRICE, = Po + 1
Subject:EconomicsPrice: Bought3
1) (70 points) Suppose we write down the following model for the final price of iPod auctions on eBay: PRICE, = Po + 1 . NEW; + 82 . SCRATCH; + 3 . PERCENT; + P4 . BIDRS; + &i, where PRICE, is the final price of auction i, NEW; is a dummy variable which equals one when the ipod is new, SCRATCH, is a dummy variable which equals one if the ipod is scratched, PERCENT, is the percentage of positive seller feedback, and BIDRS; is the number of bidders in the auction i. Each of the following questions has four parts, referring to each of the slope coefficients: B1, B2, B3, and B4 corresponding to the variables NEW;, SCRATCH;, PERCENT;, and BIDRS; respectively. (1) Before you collect data and run a regression, what signs do you expect for each of the slope coefficients? (2) For each coefficient, write down the hypothesis test (a null hypothesis and alternative hypothesis) corresponding to the sign you expect for each coefficient. (Hint: these should all be one-sided tests.) (3) Using the following regression results (produced by Gretl), calculate the t statistics associated with each of the tests you wrote down above. Show your work Model 1: OLS, using observations 1-215 Dependent variable: PRICE coefficient std. error t - ratio p-value const 82. 6720 19.4564 4.249 3.23e -05 * * * NEW 55 . 4187 5.34081 1. 25e - 20 * * * SCRATCH 20.9501 5. 11555 6. 02e -05 * * * PERCENT 0. 277886 0. 198099 0. 1622 BIDRS 0. 633572 0. 590534 0. 2846
