Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Econometrics Expert

problem: Following the general methodology used by econometricians as describeed in the session for week 1 (eight steps), describe how you would proceed to determine if a good complies with the Law of Demand.

problem: Find out how the Ordinary Least Squares (OLS) method estimates b1 and b2 for the simple linear equation (Y = B1 + B2 X). Once you had estimated the equation, elucidate how you would determine whether it is a good fit for the actual equation.

problem: Analyzing data at country level, Helble and Sato (2011) estimated the given relationship between the alcohol consumption per capita (Alc) and the growth rate of GDP per capita (gGDP).

Alc = 4.198 + 0.088 gGDP                    
R2 = 0.004,
n = 4829
Standard error = (0.144) (0.031)

a) Set up a 95% confidence interval for the slope (B2).
b) Using the confidence interval computed in (a) test the hypothesis that B2=0.
c) Test the significance at 5% of B2 by means of the t-test.  
d)  Discuss the relationship this equation reflects, elaborating on the meaning of the R2, and the result of the t-test.

problem: In the table below you can find data on the recommended retail price for a 20 cigarette pack (RRP, pounds sterling) and UK consumption of cigarettes (UKDP, in billion cigarettes) for 20 years. Data is sourced from the Tobacco Manufacturers' Association.

a) Discuss the relationship, if any, you would expect between the two variables.
b) Draw the scatter plot between UKDP and RRP.
c) Do an OLS regression, interpret and discuss your results fully. 
d) Establish a 95% confidence interval for the slope and test the hypothesis that the true slope coefficient is zero.
e) Suppose the government decides to increase tax so that the RRP reaches £6. Forecast consumption at this price level.

685_UKDP and RRP.jpg

problem:

a) Design a simple econometric project to identify the factors that affect the demand for a good or service of your preference. Estimate the significance of these factors using multiple regression analysis (at least two explanatory variables) and using at least 20 data points. Use a full range of econometric techniques in your project including estimating your model using absolute values and natural logs of these values.

Interpret the coefficients, their individual statistical significance, joint significance, and model goodness-of-fit in order to evaluate the usefulness of the econometric techniques in identifying the factors that affect demand.

b) Estimate the demand equation in (a) with only one explanatory variable and compare your results with those in (a) identifying the consequences of this type of specification error.

problem:

a) Give two exs of economic variables that can introduce a multi-collinearity problem into your OLS estimation and two other exs for heteroscedasticity.

b) Discuss the problems and practical issues both multicollinearity and heteroscedasticity may create on the variables you have chosen in (a).

c) Briefly describe the possible solutions you could apply to resolve the issues identified in (b).

problem: The following equation is estimated to assess the effects of gender and education on wages (standard errors in brackets):

ln(wage) = 0.389 – 0.227 female + 0.082 educ – 0.0056 female . educ
(0.119)  (0.168)             (0.008)          (0.0131)
n = 526, R2 = 0.441

Where wage is the wage in dollars per hour, female is a dummy variable indicating female gender (1) or otherwise (0), and educ is the years of education.

a) Interpret the equation and the goodness-of-fit.
b) Test the individual significance of the coefficients for female, educ, and the interaction effects at the 1%, 5%, and 10% levels.
c) Is this estimation likely to be affected by autocorrelation? describe why.

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9187

Have any Question? 


Related Questions in Econometrics

For this assignment you will write a 1000-word

For this assignment, you will write a 1000-word, character-driven analysis on London/Jewett/Krakauer's ideas on human interaction with the natural world. Please feel free to use your "-ism" definitions for guidance. In a ...

Promoters of a major college basketball tournament estimate

Promoters of a major college basketball tournament estimate that the demand for tickets on the part of adults is given by Q ad = 5,000 - 10P, and that the demand for tickets on the part of students is given by Q st = 10, ...

Two pink slime producers xl and ipsp are located in an

Two pink slime producers, XL and IPSP, are located in an otherwise pastoral mountain town. Each producer emits 30 tons of ammonium hydroxide into the atmosphere each year. City planners wish to cut the level of ammonium ...

General medical makes disposable syringes for hospitals and

General Medical makes disposable syringes for hospitals and doctor supply companies. The company uses cost-plus pricing and currently charges 150 percent of average variable costs. General Medical learned of an opportuni ...

1 identify a strength and a weakness of each of the

1. Identify a strength and a weakness of each of the following fuels: (a) Coal (b) Hydrogen (c) Natural Gas (d) Solar Fuel 2. If all of the energy from the sun were captured by solar cells with efficiency levels in the m ...

Artica is a nation with a simple economy that produces only

Artica is a nation with a simple economy that produces only six goods: oranges, bicycles, magazines, paper, orange juice, and hats. Assume that half of all the oranges are used to produce orange juice and one-third of al ...

The economics in practice describes prosperity and

The Economics in Practice describes prosperity and recession as they are depicted in literature. In mid-2009, there was a debate about whether the U.S. economy had entered an economic expansion. Look at the data on real ...

Draw a figure to illustrate the answer given in solved

Draw a figure to illustrate the answer given in Solved Problem 5.4. Use math and a figure to show how adding an ad valorem tax changes the analysis. (See the application "Shipping the Good Stuff Away.") Problem 5.4 Deriv ...

The countries of figistan and blah are small island

The countries of Figistan and Blah are small island countries in the South Pacific. Both produce fruit and timber. Each island has a labor force of 1,200. The following table gives production per month for each worker in ...

A company is planning to invest 75000 before taxes in a

A company is planning to invest $75,000 (before taxes) in a personnel training program. The $75,000 outlay will be charged off as an expense by the firm this year (year 0). The returns estimated from the program in the f ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen