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

An accident on a highway involving a tanker truck spilled

An accident on a highway involving a tanker truck spilled 5000 gallons of 1,2-dichloroethene (DCA) forming a 2500-m 2 pool. DCA has a vapor pressure of 0.1 atm at 298 K. The air temperature is 25 C and the wind speed ave ...

Suppose that the government of lumpland is enjoying a fat

Suppose that the government of Lumpland is enjoying a fat budget surplus with fixed government expenditures of G = 150 and fixed taxes of T = 200. Assume that consumers of Lumpland behave as described in the following co ...

Record us corn crop up 24 is forecast the usda reported

Record U.S. corn crop, up 24%, is forecast The USDA reported that world corn production will be 9.9 percent greater than last year's, while U.S. corn production will be 24 percent larger. The price of corn is expected to ...

A man walks along a guide at a constant velocity upsilon on

A man walks along a guide at a constant velocity υ on a disk in the vertical direction in Fig. P5.2 while the disk rotates at a constant angular velocity ω. Find the inertial force acting on the man at the position shown ...

From your previous courses in economics do you recall the

From your previous course(s) in economics, do you recall the concepts of demand, supply, and equilibrium? Do you recall the meaning of the elasticity of demand? perfect competition? factor markets? the production frontie ...

Normally people in the united states and from around the

Normally, people in the United States and from around the world think of highly rated corporate or government bonds as a safe place to put their savings relative to common stocks. Because the stock market had performed s ...

Vaccinations help protect the unvaccinated from disease

Vaccinations help protect the unvaccinated from disease. Boulier et al. (2007) find that the marginal externality effect can be greater than one case of illness prevented among the unvaccinated. Is vaccination a public g ...

Draw two graphs with identical demand curves for pollution

Draw two graphs with identical demand curves for pollution defined by the equation Q = 100 TM P, with Q being the quantity of pollution and P being the price per unit of pollution. Assuming that all pollution costs are e ...

Related to the economics in practice on p 383 the economics

[Related to the Economics in Practice on p. 383] The Economics in Practice article states that trade between developed nations fell in the last quarter of 2008, with the value of exports and imports of goods and services ...

According to borjas 2003 immigration into the united states

According to Borjas (2003), immigration into the United States increased the labor supply of working men by 11.0% from 1980 to 2000 and reduced the wage of the average native worker by 3.2%. From these results, can we ma ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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