Regression Analysis for
Estimating Demand Function
Estimating the Demand Function using
Regression Analysis
Regression Analysis
Start Excel and open the Data worksheet.
Select the Data Analysis in the Analyze group of the Data tab of the
Ribbon. If the Data Analysis add-in is not available, you will need to add
it.
Select Regression and click OK.
In the Regression dialog box:
Select cells A1:A13 as the Input Y Range (the dependent variable).
Select cells B1:C13 as the Input X Range (the independent variables).
Check the Labels box to indicate that the first row contains column
labels.
Do not check any additional boxes.
Choose cell E1 on the Data worksheet as the Output Range.
Click OK.
Estimated Demand Function
In cells E7, G7, and J7, enter the coefficients of the estimated demand
function using cell references to the values obtained on the Data
worksheet.
Statistical Significance
In cell L10, enter the value of the t-statistic for the coefficient of P
using a cell reference and the Excel ABS function.
In cells C11 and H11, determine whether the absolute value of the t-
statistic for the coefficient of P is greater than the critical value and
whether the coefficient is significantly different from zero.
In cell L12, enter the value of the t-statistic for the coefficient of P0
using cell references and the Excel ABS function.
In cells C13 and H13, determine whether the absolute value of the t-
statistic for the coefficient of P0 is greater than the critical value and
whether the coefficient is significantly different from zero.
R-squared
In cell E16, enter the value of the R-squared using a cell reference.
Close the workbook and then exit Excel.
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