LAB-2.Econ 301Bilkent University

pdf

School

Çankaya University - Balgat Campus *

*We aren’t endorsed by this school

Course

301

Subject

Economics

Date

Nov 24, 2024

Type

pdf

Pages

Uploaded by SuperSnake4788

Econ 301 Bilkent University Fall 2023 Econometrics Department of Economics Lab Exercise 2 The relationship between average hourly earnings (ahe) and consumer prices (cpi) is modelled as follows: log( 𝑐𝑝𝑖) 𝑖 = 𝛽 0 + 𝛽 1 log (𝑎ℎ𝑒) 𝑖 + 𝑢 𝑖 and the data is presented in file lab02.xls. a) Find the range of values and compute the mean and variance of the variables in the model. b) Graph the above line graph of average hourly earnings and consumer prices. Visually do you expect to see a positive or negative relationship between average hourly earnings and consumer prices in the USA? c) Estimate the above model. What are the interpretations of 𝛽 ̂ 0 and 𝛽 ̂ 1 . d) Write out the fitted (estimated) relationship. Compute the fitted value of cpi for October 2023. e) Plot (graph) the actual, fitted values of cpi and the residual values for that model. f) Rename the residual of the estimation conducted, ie Genr resid2=resid . g) Prove numerically that 𝑐𝑝𝑖 𝑡 = 𝑐𝑝𝑖 𝑡 ̂ + 𝑢 𝑡 ̂

h) Compute the sum of squared residuals, and R 2 of the regression. Interpret the coefficient of determination. i) Compute the estimated unbiased variance of the error term, ie. 2 ˆ  .What is the formula? j) Test the significance of the average hourly earnings variable. 𝐻 𝑜 : 𝛽 1 = 0 𝐻 1 : 𝛽 1 ≠ 0 What is your conclusion? k) Test the following hypothesis: 𝐻 𝑜 : 𝛽 1 = 1 𝐻 1 : 𝛽 1 ≠ 1 at the 5% significance level. l) Test the following hypothesis: 𝐻 𝑜 : 𝛽 1 ≤ 1 𝐻 1 : 𝛽 1 > 1 at the 5% significance level. m) Construct a 95% confidence interval for 𝛽 1 . n) What do you think about the unbiasedness property? Does the OLS estimator provide an unbiased estimator of the effect of the average hourly earnings?

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

GA Real Estate (162).pdf

96.docx

HS3810Unit3GradedQuizAY2024T2Attempt5.pdf

Screenshot_44.jpg

PROBLEMAS 3.pdf

Article Portfolio.edited.docx

FINAL..docx

example.pptx

2016 mgmt 104 first midterm -sample-.docx

Walkability and Social Capital.docx

Order # 15839.edited.docx

Speakers notes.edited (1).docx

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...

Economics

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:Cengage Learning

MACROECONOMICS FOR TODAY

Economics

ISBN:9781337613057

Author:Tucker

Publisher:CENGAGE L

Micro Economics For Today

Economics

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Cengage,

Economics For Today

Economics

ISBN:9781337613040

Author:Tucker

Publisher:Cengage Learning

Survey Of Economics

Economics

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Cengage,

Microeconomics: Principles & Policy

Economics

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
MACROECONOMICS FOR TODAY
Economics
ISBN:9781337613057
Author:Tucker
Publisher:CENGAGE L
Micro Economics For Today
Economics
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Cengage,
Economics For Today
Economics
ISBN:9781337613040
Author:Tucker
Publisher:Cengage Learning
Survey Of Economics
Economics
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Cengage,
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning