Macro economists are interested in why countries have different gross domestic products (gdp). the following regression for 108 countries relates the natural log of gdp to the natural log of the country's population, whether or not the country is landlocked (i. e. no access to oceans), whether the country is a democracy, and the interaction of landlocked and democracy. ingdp; = 26.65+0.73lnpopi-0.19landlocki +0.25demi +0.08landlock *dem (4.97) (0.12) (0.12) (0.15) (0.05)
a) what is the effect of being landlocked on gdp for a non-democracy? for a democracy?
b) test the hypothesis that being a landlocked country has no effect on gdp against the alternative that it does at the 95% confidence level (for a country that is not a democracy).
c) test the hypothesis that being a landlocked country has no effect on gdp against the alternative that it has a negative effect at the 90% confidence level (for a country that is not a democracy).
d) you suspect that the elasticity of gdp with respect to population is 1 (a 1% difference in population is associated with a 1% difference in gdp). do you reject this hypothesis at the 95% level?
e) interpret the coefficient on the interaction between "landlock" and "dem" in a sentence.
f) what is the p-value of the coefficient on the interaction term? interpret the p-value in a sentence.
g) what is the 99% confidence interval of the effect of being a democracy on gdp for a country that is not landlocked?