An application of an econometric model to describe the behavior of buyers and sellers

Abstract

This study is an attempt to describe the behavior of buyers and sellers. Four econometric models were developed using data obtained on sales consummated. The models, whose coefficients were estimated using stepwise linear regression, illustrated relationships between asked price, sale price, physical parameters of the goods and time of sale. Both statistical and economic interpretation were given to the results obtained. the problems of multicollinearity, hetero-scedasticity and explicit treatment of the time variable were discussed.