Prediction

Similarly, gretl can be used to produce predictions. The predicted food expenditure of an average household having weekly income of $2000 is:

foodTexpt = 83.42 + 10.21incomet = 83.42 + 10.21(20) = 287.61 (2.5)

Remember, income is measured in $100, so 20 in the above expression represents 20*$100=$2,000. The gretl script is:

scalar yhat = $coeff(const) + $coeff(income)*20

which yields the desired result.

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