(b) Suppose that you have got the following estimated results in estimating a relationship between Y and X in a dynamic framework: y=2.7+0.6x +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: y=2.7+0.6x +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

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

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

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

Chapter4A: Problems In Applying The Linear Regression Model

Section: Chapter Questions

Problem 2E

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