Question
Assume you run regression where you explain vineyard land profits as a function of temperature, rainfall and a time trend. The table below reports the results of two different models. The dependent variable is the natural logarithm of profits.
Equation 1
Ln(profit) |
Equation 2
Ln(profit) |
|
Temperature
(in degree Celsius) |
0.402(6.62) | 0.302(6.99) |
(Temperature)2
(in degree Celsius) |
-0.009(4.09) | |
Rainfall Harvest
(in milliliters) |
-0.435(-2.99) | -0.455(-3.04) |
Trend | 0.021(6.66) | 0.022(6.36) |
R2 | 0.88 | 0.86 |
work.