A researcher investigating whether government expenditure crowds out investment estimates a regression on data for 30 countries. I-investment; G-government recurrent expenditure; Y-gross domestic product; all measured in $US billion. P= population measured in million. Standard errors are in parentheses. i 18.10 1.07G + 36Y (7.79) (0.14) (0.02) R² = 0.99 She suspects that countries with higher GDP may have more variability in their investment. She sorts the observations by increasing size of gdp per capita (Y)and estimates the regression again for the 11 countries with the lowest gdp(Y)and the 11 countries with the largest gdp(Y). The RSS1 from the first regression is 7186. The RSS2 from the second regresison is 28101. Perform a Goldfeld-Quandt Test at a 5% significance level. a. The test statistic for this test is 0.256 b. The critical value defining the rejection region for Ho is 3.18 c. Is there heterscedasticity? Yes=1 or No-0. The answer is 0

A researcher investigating whether government expenditure crowds out investment estimates a regression on data for 30 countries. I-investment; G-government recurrent expenditure; Y-gross domestic product; all measured in $US billion. P= population measured in million. Standard errors are in parentheses. i 18.10 1.07G + 36Y (7.79) (0.14) (0.02) R² = 0.99 She suspects that countries with higher GDP may have more variability in their investment. She sorts the observations by increasing size of gdp per capita (Y)and estimates the regression again for the 11 countries with the lowest gdp(Y)and the 11 countries with the largest gdp(Y). The RSS1 from the first regression is 7186. The RSS2 from the second regresison is 28101. Perform a Goldfeld-Quandt Test at a 5% significance level. a. The test statistic for this test is 0.256 b. The critical value defining the rejection region for Ho is 3.18 c. Is there heterscedasticity? Yes=1 or No-0. The answer is 0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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