(b) Suppose that you have got the following estimated results in estimating a relationship between Y and X in a dynamic framework: Y₁ = 2.7 +0.6x₁ +0.05y₁-1 (0.392) (0.004) R2=0.989, DW =0.06 [The figures in parentheses show standard errors] In your estimation even R² is very high, the results are useless. Explain why this estimation is useless. (c) "Univariate regression analysis is more meaningful with time series data than with cross-section data." Discuss. 5 10 5
(b) Suppose that you have got the following estimated results in estimating a relationship between Y and X in a dynamic framework: Y₁ = 2.7 +0.6x₁ +0.05y₁-1 (0.392) (0.004) R2=0.989, DW =0.06 [The figures in parentheses show standard errors] In your estimation even R² is very high, the results are useless. Explain why this estimation is useless. (c) "Univariate regression analysis is more meaningful with time series data than with cross-section data." Discuss. 5 10 5
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![(b) Suppose that you have got the following estimated results in estimating
a relationship between Y and X in a dynamic framework:
Y₁ = 2.7 +0.6x₁ +0.05y₁-1
(0.392) (0.004)
R2=0.989, DW =0.06
[The figures in parentheses show standard errors]
In your estimation even R² is very high, the results are useless. Explain
why this estimation is useless.
(c) "Univariate regression analysis is more meaningful with time series data
than with cross-section data." Discuss.
5
10
5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c7b6513-5229-4ef3-acca-d2acd46fc8da%2Fd0ca2929-2946-404b-b4d9-eb1191f32b8e%2Fr1wmd85_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(b) Suppose that you have got the following estimated results in estimating
a relationship between Y and X in a dynamic framework:
Y₁ = 2.7 +0.6x₁ +0.05y₁-1
(0.392) (0.004)
R2=0.989, DW =0.06
[The figures in parentheses show standard errors]
In your estimation even R² is very high, the results are useless. Explain
why this estimation is useless.
(c) "Univariate regression analysis is more meaningful with time series data
than with cross-section data." Discuss.
5
10
5
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