John Swanson, president of Market Research Inc., has asked you to estimate the coefficients of the model Y = b0 + b1 X 1 + b2 X 21+ b3 X 2 where Y is the expected sales of office supplies for a large...

John Swanson, president of Market Research Inc., has asked you to estimate the coefficients of the model


Y
= b0 + b1X1 + b2X21+ b3X2


where
Y
is the expected sales of office supplies for a large retail distributor of office supplies,
X1 is the total disposable income of residents within 5 miles of the store, and
X2 is the total number of persons employed in information-based businesses within 5 miles of the store. Recent work by a national consulting firm has concluded that the coefficients in the model must have the following restriction:


b1 + b2 = 2


Describe how you would estimate the model coefficients using least squares.




May 08, 2022
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