0.a)Whatarethedangersofestimatingamodelwithoutanintercept?
Qg= 150.83–0.75Pg+ 0.37Po+0.65Y.
(0.04)(0.23)(0.02)(0.52)R-square=0.78
b)Whatcanweconcludeabouttheinterceptofthemodeli.e.,canwesaythatthe
interceptis important inthismodel ina statisticalsense?
A. a) The dangers of estimating a model without an intercept include the potential for biased estimates of the coefficients, as well as the potential for the model to be misspecified. Without an intercept, the model assumes that the dependent variable is zero when all of the independent variables are zero, which may not be the case in reality. Additionally, the lack of an intercept may lead to a lack of fit in the model, resulting in a lower R-squared value.
b) From the R-squared value of 0.78, we can conclude that the intercept is important in this model in a statistical sense. The R-squared value indicates that the model is able to explain 78% of the variation in the dependent variable, which suggests that the intercept is playing an important role in the model.