For this question, create a new column in the dataset where total rainfall is just the sum of our three separate rainfall variables. (Solve this question by Excel) (a) plot crop yield vs. time. Does yield appear to be stationary? Why or why not? (b) plot total rainfall vs. time. Does total rainfall appear to be stationary? Why or why not? (c) plot the first-difference of crop yield vs. time. Does this series appear to be stationary? Why or why not? (d) formally test whether crop yield, rainfall and the first-difference of crop yield are stationary using the appropriate test. Be sure to do all parts of the hypothesis tests. After these tests, what can you say the order of integration is for each of the variables? (e) estimate a model where yield is a function of rainfall and time. You do not have to worry about the time variable being stationary or not, but the other two must be stationary (you might need to difference one or both of them to make it stationary). Fully report your results. (f) test your model for autocorrelation using both a bounds test and an LM test. Be sure to do all parts of the hypothesis test.
For this question, create a new column in the dataset where total rainfall is just the sum of our three separate rainfall variables. (Solve this question by Excel)
(a) plot crop yield vs. time. Does yield appear to be stationary? Why or why not?
(b) plot total rainfall vs. time. Does total rainfall appear to be stationary? Why or why not?
(c) plot the first-difference of crop yield vs. time. Does this series appear to be stationary? Why or why not?
(d) formally test whether crop yield, rainfall and the first-difference of crop yield are stationary using the appropriate test. Be sure to do all parts of the hypothesis tests. After these tests, what can you say the order of integration is for each of the variables?
(e) estimate a model where yield is a
(f) test your model for autocorrelation using both a bounds test and an LM test. Be sure to do all parts of the hypothesis test.
Dataset:
Yield | Time | Rg | Rd | Rf |
1.3508 | 1 | 1.708 | 1.475 | 0.916 |
0.9476 | 2 | 1.544 | 1.552 | 0.478 |
1.2569 | 3 | 1.561 | 1.692 | 1.005 |
0.9142 | 4 | 2.668 | 1.476 | 0.646 |
1.1022 | 5 | 1.163 | 2.103 | 0.382 |
1.1897 | 6 | 1.506 | 3.207 | 1.322 |
1.0689 | 7 | 2.934 | 1.204 | 0.691 |
0.9007 | 8 | 2.624 | 1.067 | 0.525 |
1.2231 | 9 | 1.311 | 2.852 | 0.496 |
1.2434 | 10 | 1.381 | 1.078 | 0.521 |
1.1427 | 11 | 1.787 | 1.777 | 0.681 |
0.7998 | 12 | 1.067 | 1.736 | 0.395 |
0.8468 | 13 | 2.452 | 1.386 | 0.897 |
0.8938 | 14 | 2.81 | 2.56 | 0.727 |
0.9006 | 15 | 1.904 | 3.19 | 0.63 |
1.0955 | 16 | 1.875 | 1.779 | 0.991 |
0.988 | 17 | 1.205 | 1.527 | 1.088 |
0.9408 | 18 | 2.664 | 1.943 | 0.32 |
0.8939 | 19 | 2.195 | 1.594 | 1.004 |
0.3629 | 20 | 1.175 | 0.756 | 0.121 |
1.7111 | 21 | 2.025 | 0.901 | 0.751 |
1.5152 | 22 | 0.793 | 1.089 | 1.415 |
1.5135 | 23 | 0.988 | 1.788 | 0.38 |
1.8519 | 24 | 1.782 | 1.7 | 1.362 |
1.2963 | 25 | 1.944 | 1.996 | 0.636 |
1.5072 | 26 | 1.114 | 2.076 | 1.074 |
1.5867 | 27 | 1.058 | 1.253 | 0.78 |
1.3538 | 28 | 1.02 | 1.484 | 0.76 |
1.6757 | 29 | 1.488 | 1.48 | 0.628 |
1.475 | 30 | 1.37 | 1.172 | 0.204 |
1.3289 | 31 | 1.192 | 1.294 | 0.65 |
1.28 | 32 | 3.158 | 1.662 | 0.499 |
1.5357 | 33 | 1.419 | 1.306 | 0.606 |
1.2079 | 34 | 1.896 | 1.87 | 0.826 |
1.6154 | 35 | 1.514 | 1.22 | 0.652 |
1.6497 | 36 | 0.742 | 1.558 | 0.456 |
1.6914 | 37 | 1.836 | 1.676 | 0.339 |
2.1408 | 38 | 1.464 | 1.668 | 0.52 |
2.3132 | 39 | 1.522 | 1.11 | 0.77 |
2.2897 | 40 | 0.9 | 2.076 | 0.804 |
2.0983 | 41 | 1.992 | 1.705 | 0.76 |
1.9555 | 42 | 1.63 | 1.86 | 0.906 |
1.8192 | 43 | 1.298 | 1.558 | 0.89 |
2.3881 | 44 | 1.939 | 1.236 | 0.476 |
2.2106 | 45 | 2.009 | 2.017 | 0.87 |
2.4475 | 46 | 1.333 | 2.307 | 1.157 |
2.3959 | 47 | 0.892 | 1.634 | 0.79 |
2.9669 | 48 | 1.376 | 1.358 | 0.656 |
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