re interested in studying cigarette demand by young adults. Lets consider the following model: ncaj = β0 + β1price + β2age + β3income + u where ncaj is monthly cigarette consumption in packs, price is the price of a pack of cigarettes in dollars, age is age in years, and income is annual income in thousands of dollars. Consider now an extension of the model that allow the effect of the price to differ by age. Holding all other factors fixed, is the effect of price on ncaj constant? (This part is theoretical and you do not have to estimate the model.)
We are interested in studying cigarette demand by young adults. Lets consider the
following model:
ncaj = β0 + β1price + β2age + β3income + u
where ncaj is monthly cigarette consumption in packs, price is the price of a pack of
cigarettes in dollars, age is age in years, and income is annual income in thousands
of dollars.
Consider now an extension of the model that allow the effect of the
price to differ by age. Holding all other factors fixed, is the effect of price on
ncaj constant? (This part is theoretical and you do not have to estimate the
model.)
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Just to be clear, could we say that there is a
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