The Italian Bureau of Statistics is interested in understanding the relationship between household size and food consumption among italian households. This information is useful since food consumption is a strong predictor of long term household well-being. Knowledge of its relationship with household size would allow to construct equivalence scales that relate households’ well-being with the number of individuals in the households. Equivalence scales might then be used as an input in designing tax exemptions. In order to answer this question the Bureau has provided you with survey data on food expenditures along with a set of demographic characteristics for each household in a randomly selected sample. The survey sample is representative of the italian population and are collected in 2012. The file food.dta contains the following information for 20,506 households in the sample: • food – monthly food consumption in euros • price food – food price index (quarterly) • hhsize – household size • month – month (1-12) • age – age of the head of the household • female – household head is female • male – household head is male • macroarea1 – macroarea4 – dummies for macroarea (1 – North, 2 – Centre, 3 – South, 4 – Islands) 1 • married, separated, single, widowed – household head marital status • employed, unemployed, retired – household head employment status (only if employed, 0 otherwise) • whitecollar, bluecollar, selfemployed – household head type of work Objective of the project is a report with your estimates on how household size affects food consumption, other things being equal. You are required to specify an econometric model to answer the research question of interest and provide information on how you selected that model. Details on the statistical methods adopted should be included as if the reader was a statistician from the Italian Bureau of Statistics. The report should be typed-in and should simulate an actual report. Submission instructions
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