Answer to Question #250060 in Economics for Maphula

Question

c) In order to improve the model, the two researchers added the variable T (time) 

and obtained:

Yt = -0.740 + 0.578 It + 0.218 Dt + 46.6 Rt – 40.4 Tt

(1755) (0.442) 

(0.959) (10.9) (26.9) 

Standard error of estimates are in parenthesis

Adjusted R2 = 0.61

Given that irrigated area increased and dry land area decreased over the sample 

period, give reasons why you could have expected the coefficient of It, Dt and Rt to 

change the way they have.

Answer 1

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