We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Econometrcs - Essay Example

Comments (0)
Summary
Your Full Name: Topic: Econometrics, Essay Subject: Question 1. log(Urea Amount) = 9.760-0.182 log(Previous years application)-0.0561 log (Urea Price)+0.459 log(Open Market Price of Paddy)- 0.261log(Wages)-0.145log(Oil Price) Table 1: Econometrics Estimates (1) (2) Urea Amount(Mt) Log Urea amount Lag dependent -0.137 (0.305) Urea Price (Rs/Kg) -0.00218 (0.0125) Open Market Price of Paddy (Rs/Mt) -91.73* (32.53) Wages (Rs/Day) 44.99 (67.63) Oil Price(Rs/Bbl) 4.822* (2.117) Log- Lag dependent -0.182 (0.320) Log-Urea Price (Rs/Kg) -0.0561* (0.0621) Log- Open Market Price of Paddy (Rs/Mt) 0.459* (0.131) Log- Wages (Rs/Day) -0.261 (0.188) Log- Oil Price(R…
Download full paper
GRAB THE BEST PAPER
Econometrcs
Read TextPreview

Extract of sample
Econometrcs

Download file to see previous pages... Accordingly the log-log model was found consistent with the economic theory. For example, the coefficient of own price was not significant while the coefficient of output price was negatively correlated in the linear-linear model. Cost minimizing farmers’ input demand however, should be positively correlated to the output price i.e. with increasing output price which in turn increase farmer’s profit the demand for inputs also should increase. Therefore, in the urea fertilizer demand model the paddy price should be positively correlated with the fertilizer demand. And also the price of urea should be negatively and significantly correlated to the demand for urea. Hence the log-log model is consistent with the economics theory. Therefore, it was used for interpretation as follows. Table2: Test for Autocorrelation Breusch-Godfrey LM test for autocorrelation lags(p) chi2 df Prob > chi2 1 0.520 1 0.4709 H0: no serial correlation N*R2 = 23*0.516 = 11.868 N*R2 > chi2 Therefore reject H0. There is auto correlation in the model. Thus the robust estimates were taken. Table3: Test for Multicolinarity Variable VIF 1/VIF Log-Urea Price (Rs/Kg) 2.67 0.37453 Log- Open Market Price of Paddy (Rs/Mt) 2.42 0.41322 Log- Wages (Rs/Day) 2.08 0.48072 Log- Lag dependent 1.58 0.63344 Mean VIF 2.19 ii) In log-log equations the coefficients reflects the price elasticity of the respective variables. For example in the above model the own price elasticity of urea demand is -0.0561 i.e. with 1 percentage proportion decrease in urea price the increase the demand for urea by 5.6 percentage proportion. Similarly, the elasticity of urea demand for paddy price is 0.459 i.e. 1 percentage proportion increase in open market price of paddy can increase the demand for urea fertilizer by 45.9 percentage proportion. In the model the largest, significant coefficient was associated with the open market price of paddy. This shows that paddy farmers production decisions are influenced highly by the output price compared to the price of other factors of production such as fertilizer, labor and crude oil. However both own price elasticity and output price elasticitys are less than one and hence are inelastic. The demand for fertilizer is negatively correlated to the wage rates and crude oil prices. With increasing wage rates and oil prices the cost of production increase and hence these variables are negatively correlated in the demand model. The elasticity of demand with respect to wage rates is -0.261 while the elasticity of demand with respect to crude oil price is -0.145. therefore the demand for urea fertilizer decrease by 26.1 and 14.5 percentage proportions with respect to 1 percentage proportion increase in wage rates and crude oil prices respectively. Crude oil price represent the transport cost and also paddy processing costs. The goodness of fit as denoted by the adjusted R2 value of the above model is 51.6 percentage proportion and the probability value of the f statistic was 0.00. Therefore the model is statistically significant ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Strategic audit of Asics Corporation
After the First World War, a Mr Onitsuka Kihachiro started a small business; Panmure company to make basketball shoes in his Kobe hometown, and quickly gained popularity in manufacturing sports equipment. The 1966 Mexico design is among the most noteworthy designs by Onitsuka.s.
12 Pages(3000 words)Research Paper
Destination Management
Destination management constitutes generation of marketing information pertaining to demand and supply chain functions in regards to specific tourism related areas. Large amount of technical data retrieved from such process helps the management body of the tourism organisations whether operating in the regional, local and national level to help formulate effective plans and policies.
12 Pages(3000 words)Assignment
Self Recommendation Letter
Of importance in this course would be to acquire management skills necessary to run profitable hospitality business ventures. Strategic management will provide me the opportunity to align business operations with changes in the environment socio-politically, economically, technologically and legally.
6 Pages(1500 words)Personal Statement
March to the Sea: Civil War Fortifications
Fort McAllister, one of the most incredible earthwork fortifications of the world has a remarkable role in the history of the American Civil war. This fortification is an outstanding one of its kind for several reasons. Fort McAllister, set up by Confederacy, survived several attacks initiated by Union soldiers.
6 Pages(1500 words)Research Paper
Human Computer Interaction in Computing
Even the World-Wide Web is a direct result of HCI research that utilized the hypertext technology to allow users to traverse a link across the world by clicking on a link. The objective of this essay is to firstly cover the processes and methodologies used in designing interfaces.
4 Pages(1000 words)Essay
Governance and Public Policy
The commission in conjunction with the state administrator intends to develop a succinct plan for relocating the inhabitants in other areas in order to retain the benefits the school brings to the town. A
1 Pages(250 words)Case Study
Storm Over Everest (May 13, 2008) short essay ethical system analysis
Therefore, these systems are important not only in our daily activities and decision makings, but these are also crucial for people who are involved in the criminal justice field. To examine the
2 Pages(500 words)Essay
Chinese civilization
In fact, many wars were fought and many men died while protecting or honoring these codes of life. Yuan, Ming and Qing periods are filled with tales of honor. Writers, poets and calligraphers have played their part in representing the honor code during these three periods
5 Pages(1250 words)Essay
Invasive Species: Effects & Management
and sufficient planning, successful eradication of an invasive animal will lead to unexpected and unwanted impact on the native organisms found in the eco system. These unwarranted impacts are of various types, and this includes too much poisoning of organisms that are not
4 Pages(1000 words)Essay
Portfolio for Continuous Professional Development (CPD) for third year radiography students
The course has provided for me the parts for consideration and fundamental nursing abilities, creating radiographies aptitudes and
4 Pages(1000 words)Essay
Let us find you another Essay on topic Econometrcs for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us