Explain individual variable significance


Snack Foods International, Ltd. has hired you to analyze demand in 25 regional markets for a new Product Y, called Angelica Pickles. A statistical analysis of demand in these markets shows (t-statistics in parentheses):

Q Y = 250 - 10P + 6P X + 0.25A + 0.04I
(3.33) (3) (2.5) (1.26)

R 2 = 91%

Standard Error of the Estimate = 75

Here, Q Y is market demand for Product Y, P is the price of Y in dollars, A is dollars of advertising expenditures, P X is the average price in dollars of another (unidentified) product, and I is dollars of household income. In a typical market, the price of Y is $1,500, P X is $500, advertising expenditures are $50,000, and disposable income per household is $45,000. Briefly discuss the individual variable significance.

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Microeconomics: Explain individual variable significance
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