Econometrics - Assignment Example

Comments (0) Cite this document
Summary
Table 1 shows the least ordinary squares (OLS) of regressions of log per capita income on protection against expropriation variable in a variety of samples. The values in the brackets are the standard errors, occurred during the research. On average, if a country has a…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER96.9% of users find it useful
Econometrics
Read TextPreview

Extract of sample "Econometrics"

Download file to see previous pages Q.2.Suppose the impact of institutions on growth differed between African countries and the rest of the world. First, comment on why the model in equation (1) cannot capture this effect. Second, write out a model which can allow for this differential African effect. Third, develop a test that would allow you to statistically discern if this effect is actually supported by the data.
Yi is the impact of institution growth in a country i, Ri the protection against expropriation, Lati is the latitude country I (measured as the distance from the equator, and scaled to lie between 0 and 1), D Africa is a dummy for country i is in Africa and D Other i is a dummy capturing if country I is in any other and continent β as the observations made.
From table 1, the dummy for Asia is –0.62 and the dummy for Africa is -1.00. This indicates that African countries have little protection against expropriation. The values are natural logarithms of the stated values over a given base sample. Inverses of the natural logs give 0.5379 for Asia and 0.3679 for Africa. The difference is thus 0.1700. This is also equal to 32.1% growth difference.
By measuring latitude as a raw number, the effect of climate on performance would not be as precise as it is when measured from the equator, which is the central latitude and the correlation between distance from the equator and economic performance would be known, but with extremes. This changes the coefficient of the index of institutions growth. The estimates would increase, errors would increase as well and the regression, now based on raw numbers for latitudes would significantly reduce.
The ordinary least squares are used in testing the heteroskedasticity. The first step is to make OLS estimates, and the residuals saved in exponents squared. Then the squared exponents are regressed on all the variables and their squares. Then obtain R2. If nR2 is too large, the null hypothesis Ho is rejected. The auxiliary model can be seen as ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Econometrics Assignment Example | Topics and Well Written Essays - 2000 words - 1”, n.d.)
Econometrics Assignment Example | Topics and Well Written Essays - 2000 words - 1. Retrieved from https://studentshare.org/macro-microeconomics/1691157-econometrics
(Econometrics Assignment Example | Topics and Well Written Essays - 2000 Words - 1)
Econometrics Assignment Example | Topics and Well Written Essays - 2000 Words - 1. https://studentshare.org/macro-microeconomics/1691157-econometrics.
“Econometrics Assignment Example | Topics and Well Written Essays - 2000 Words - 1”, n.d. https://studentshare.org/macro-microeconomics/1691157-econometrics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Econometrics

Econometrics

...?Econometrics Regression Model Question A The other hypothesis to be investigated by this regression was weather the level of education of women had an impact on their level of availability or participation in the work place. This was to be monitored using the coefficient educ. The availability and increase of other sources of income for the family was also considered to find out weather the same affected their level of commitment at work. This was done using the variable nwifeinc. The estimated coefficients had the signs as expected and were of statistical significance, this was demonstrated clearly buy the patterns displayed by the respective graphs of the variable coefficients. It therefore demonstrated beyond any...
3 Pages(750 words)Assignment

Econometrics

...in the dependent variable are explained by changes in the independent variables. Including an insignificant variable as one of the independent variables may minimize the effects of the actual variable causing the variation in the independent variable. Like in the example above, if truly age is not a determinant of income as stated in equation 1, then including it like in equations 2 and 3 will minimize the actual effects of education on income. BIBLIOGRAPHY Greene W. H. (2003). Econometric Analysis. Fifth Edition. Prentice Hall. Pearson Education International. Anderson D. R., Sweeney D. J., Williams T. A. (2005). Statistics for Business and Economics. Ninth Edition. Thomson...
3 Pages(750 words)Essay

Econometrics

...Part The key hypothesis in this paper is that “Democracies have bad rood conditions compared to autocratic rule holding all other explanatory variables constant”.. This means that governments in the world which are perceived or are build on democratic principles have poor rood networks. The authors motivates this hypothesis by first looking at the reasons why autocratic governments may be forced to have good roads probably to enable troops to move around in case of both internal and external aggressions. Further, the author argues that autocratic government’s belief that good infrastructure facilities tend to blind the electorate. On the other hand, democratically elected governments due to the aspect of resource distribution may... The key...
5 Pages(1250 words)Speech or Presentation

Econometrics

...Question No. 8 Box and Jenkins utilized sample autocorrelation function and partial autocorrelation functions to identify order of an ARMA (autocorrelated moving average) model. If y0, y1, ... yT-1 are a sequence of values from a process, the sample autocorrelation function is Rt = ct / c0, t = 0, 1, ..., T-1 Where Ct = 1/T ∑ (yi – y-bar)(yi-t – y-bar) Is the empirical autocovariance at lag t and c0 is the sample variance. The sample partial autocorrelation pt at lag t is the correlation between the two sets of residuals obtained from regressing yi and yi-t on the set of values in between them. Box and Jenkin’s method has three steps, namely model selection, model estimation and model checking. Frequently Box and Jenkin’s... No. 8 Box and...
5 Pages(1250 words)Assignment

Econometrics

...ECONOMETRICS PART Question a) From table the correlation coefficient between health status and years of education is 0.33. When the correlation coefficient in absolute values is between 0.1 and 0.5, there is a weak correlation between the variables and when the values are between 0.5 and 0.9 there is a strong correlation. In this case, there is a weak positive correlation between the two variables. Since the coefficient is positive, there is a positive linear relationship between health status and years of education. When years in education increase, there is an improvement in health status of the individual. Question 1 (b) i. Number of doctor visits and gender The results of the regression are demonstrated in table 2....
16 Pages(4000 words)Essay

Econometrics

...work Finance and Accounting Econometrics Question Model2 (Model 2) read = 419.7 – 18.6 * noroom – 50.0 * noeng + 29.4 * fiction N = 11984, R2 = 0.204 (1.7) (2.6) (3.1) (0.6) Interpretation of the coefficient for noroom Because noroom is one of the continuous variables, its coefficient is represented by -18.6 which is a constant. If the value of noroom increases, the model value reduces Hypothesis test In order to test for the hypothesis, we use t test as follows t = (1.7-2.6)/(3.1/SQRT(18.6)) = The t score is less than 0.5 at the 5% significance level (Dougherty, 2008). This confirms the null hypothesis, that the parameter is -20 against the alternative hypothesis that the parameter is greater than -20. Question 2 The...
3 Pages(750 words)Coursework

Econometrics

... Question 3 Use the data set shorttbills.wf1. Limit the sample so that it begins in 2002. Regress the three month treasury bill rate (tb3ms) on the lagged three month rate and the twice lagged 6 month rate (tb6ms(-2)). Do the coefficients make much sense? (Okay, explain why they don’t.) Test, at the 1% level, for first-order serial correlation using the Breusch-Godfrey test. Now run the regression correcting for serial correlation by including AR(1) in the regression. Do the coefficients make sense now? Correct for second order serial correlation (add AR(1) and AR(2)). How about the coefficients now? The regression output looks like Dependent Variable: TB3MS Method: Least Squares Date: 09/17/12 Time: 15:24 Sample: 2002M01... Question 3...
1 Pages(250 words)Assignment

Econometrics

... Econometrics Question Required coefficients in the estimate table become evident through writing of the needed estimates using the fitted model, μ12 will be = (ΣkY12k)/n12 = (Σkμ)/n12 + (Σkα1)/n12 + (Σkβ2)/n12 + (Σkαβ12)/n12 + (Σkε12k)/n12 We then assume that averages of the errors in this context are zero (εijk): = μ + α1 + β2 + αβ12 Question 2 In the same way, the mean in table 1 will be: μ11 = μ + α1 + β1 + αβ11 Getting the estimates of table 1 mean, add the estimates at μ, α1, β2, and αβ12. Achieving this goes by multiplying the solution vector with a vector coefficients (e.g. Sum-product) Solution for Coefficient estimates Effect a b Estimate Standard Error DF t Value Pr > |t| Intercept     21.6100 0.2958 72 83.21 <.0001 a 1... Econometrics...
3 Pages(750 words)Assignment

Econometrics

...Lecturer’s and Number Submitted Econometrics In an influential article, ‘‘Hedonic Housing Prices and the Demand for Clean Air," David Harrison and Daniel Rubinfeld study the impact of improvements in air quality on local citizens as reflected through differences in housing prices. A simplified version of their model, which is to be studied, is ln(MVi) = β0 + β1RMi + β2 ln(DISi) +β3NOXi + β4DCHAS;i + Ɛi , (1) where the level of observation is the census tract. Further, MVi is the median housing price (measured in $1,000) for a given census tract in the Boston metropolitan statistical area. RM is the average number of rooms in owner occupied housing in the census tract; DIS is a weighted...
2 Pages(500 words)Assignment

Econometrics

...Applied Econometric paper s Affiliation Introduction This paper gives answers to certain questions regarding a study by Acemoglu, Johnson & Robinson (2001): Colonial Origins of Comparative Development. In their study, they claim that countries with quality institutions and secure property rights appear to have higher economic growth than their counterparts. From the econometric model adopted by Acemoglu, Johnson & Robinson (2001), the following questions will be answered appropriately. Question 1 The coefficient estimate (β1) measures how economic growth increases due to the increase in institutions ` quality. Therefore, economic growth will increase by 43% whenever the quality of institution increases...
11 Pages(2750 words)Speech or Presentation
sponsored ads
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.

Let us find you another Assignment on topic Econometrics for FREE!

Contact Us