QUESTION 3 - ANSWER

How much would you expect a household to increase its total monthly food expenditure for every additional household member?

To figure this out, we need to use the following regress:

sort hhid
regress mxtfood hhsizem if hhid~=hhid[_n-1]

You should come up with the following table:

  Source |       SS       df       MS                  Number of obs =    1060
---------+------------------------------               F(  1,  1058) =  110.44
   Model |  17540388.4     1  17540388.4               Prob > F      =  0.0000
Residual |   168029694  1058  158818.237               R-squared     =  0.0945
---------+------------------------------               Adj R-squared =  0.0937
   Total |   185570083  1059  175231.428               Root MSE      =  398.52

------------------------------------------------------------------------------
 mxtfood |      Coef.   Std. Err.       t     P>|t|       [95% Conf. Interval]
---------+--------------------------------------------------------------------
 hhsizem |   43.44603   4.134097     10.509   0.000       35.33407    51.55799
   _cons |   349.7945    22.4912     15.553   0.000       305.6621     393.927
------------------------------------------------------------------------------

This gives you a regression equation of:

(xfoodhat)i = 349.79 + 43.45(hhsizem)i

Therefore, for a every additonal member, a household can be expected, on average, to increase food expenditure by about 43.45 Rand per month.

Back to Questions