Answered: In multiple OLS regressions, if you are…

In multiple OLS regressions, if you are using power terms to fit for nonlinearity, how do you interpret the coefficients? For example: Yi=B1+B2X+B3X^2+Ui and B2 and B3 are both significant.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter4: Estimating Demand

Section: Chapter Questions

Problem 4E

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In multiple OLS regressions, if you are using power terms to fit for nonlinearity, how do you interpret the coefficients?

For example:

Yi=B1+B2X+B3X^2+Ui

and B2 and B3 are both significant.

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