II. QUESTIONS: (20%, each question 4%)

Lee Da-Qian estimates the empirical results for instant noodles for the logarithmic demand function as follows:

$$\mathrm{Ln}(\mathrm{D}) = 16 + 0.40 \mathrm{Ln}(\mathrm{Y}) - 0.30 \mathrm{Ln}(\mathrm{P}) + 0.01 \mathrm{Ln}(\mathrm{D}) + 0.08 \mathrm{Ln}(\mathrm{F})$$

(2.54)

(-3.11)

(1.98)

(2.04)

F = 14.687 R² = 0.887

However, Wang Xiao-Qian estimates the empirical result of instant noodles is a straight line demand function as follows:

$$\mathrm{D} = 16 + 0.42 (\mathrm{Y}) - 0.81 (\mathrm{P}) + 0.04(\mathrm{D}) + 0.09 (\mathrm{F})$$

(1.85)

(0.41)

(2.05)

(1.09)

F = 5.801

R² = 0.685

Where D is demand of instant noodles, Y is income, P is price of instant noodles, D is days of raining in a year, F is sale amount of fried pork noodles. The number in parentheses is the t-value.

# Questions:

1. Lee Da-Qian or Wang Xiao-Qian, Who's coefficient of the estimating result is more useful and valid, Why?