The Department of Agriculture is currently looking at the nation’s consumption of chicken. Data have been gathered dating back to 1970, in hopes of finding variables that are closely correlated with chicken consumption so that the consumption can be predicted. In the spreadsheet you will find 36 observations…one for each year since 1970. The variables are:

Year = Year

Y = per capita consumption of chicken (lbs.)

X1 = Real disposable income per capita ($)

X2 = Real retail price of chicken per lb (cents)

X3 = Real retail price of pork per lb. (cents)

X4 = Real retail price of beef per lb. (cents)

X5 = Composite real price of chicken substitutes per lb., which is a weighted average of the real retail prices per lb of pork and beef, the weights being the relative consumption of beef and pork in total beef and pork consumption.

(The actual data is in the Minitab worksheet that is attached.)

Case Deliverables

1. Create a model using the 5-step methodology I used in class. Examine and discuss the coefficients you obtained in your model, and the overall significance of your model. Begin with a summary of your findings and then step through your process. Cut and paste your results from minitab in your report
2. Now create a model just like you did above, but this time, do not use the variable ‘Per Capita Disposable Income’. See if you can come up with a model that is as good as the model above.

Case Deliverables

1. Create a model using the 5-step methodology I used in class. Examine and discuss the coefficients you obtained in your model, and the overall significance of your model. Begin with a summary of your findings and then step through your process. Cut and paste your results from Minitab in your report
2. Now create a model just like you did above, but this time, do not use the variable ‘Per Capita Disposable Income’. See if you can come up with a model that is as good as the model above.

1. Calculate the following elasticities, using the means of the variables, obtaining separate estimates from each of the regressions.

1. Own price elasticity of chicken
2. Income elasticity
3. Cross price elasticity with pork
4. Cross price elasticity with beef
5. Cross price elasticity with chicken substitutes

1. Discuss any variables you ideally might like to add to the model, both:
   1. Hypothetical
   2. Realistic

Then add any single variable for which you can obtain data to the model and discuss how your results change. Do you think this improves the model or not?

V. Discuss the strengths and weaknesses of your demand study. Discuss what it may reasonably be used for and what it leaves out.

VI. If you were going to do a retail level demand study for one particular company’s chicken products (for example, Tyson), what would you do differently from the above?

Price: $49.99

Solution: The downloadable solution consists of 23 pages, 4331 words and 3 charts.
Deliverable: Word Document