The following model was specified to investigate the relationship between mineral exploitation and energy consumption in a small state over 1970-2006: ln(mining)t= β0 + β1ln(GDP_m)t + β2ln(exports)t + β3ln(energy)t + et where mining = the output of the mining and quarrying industry (constant 2000 US dollars); GDP_m = GDP less mining and quarrying industrial output (constant 2000 US dollars); exports = exports (constant 2000 US dollars); and energy = energy consumption (million kilowatts hours). OLS estimation of the preceding equation yields ln(mining)t=-5.76+0.81ln(GDP_m)t+0.21ln(exports)t-0.09ln(energy)t t-stat = (-3.82) (12.76) (3.53) (-2.49) p-value = (0.001) (0.000) (0.001) (0.017) R2=0.8905 n = 37 Durbin-Watson stat = 0.98 a) Use the p value approach to find out whether energy contributes negatively to mineral exploitation at the 5% level. Hint: specify the 5+1 steps. b) Use formula in Appendix to calculate adjusted R2. c) What does adjusted R-squared imply?
The following model was specified to investigate the relationship between mineral exploitation and energy consumption in a small state over 1970-2006:
ln(mining)t= β0 + β1ln(GDP_m)t + β2ln(exports)t + β3ln(energy)t + et
where mining = the output of the mining and quarrying industry (constant 2000 US dollars);
GDP_m = GDP less mining and quarrying industrial output (constant 2000 US dollars);
exports = exports (constant 2000 US dollars); and
energy = energy consumption (million kilowatts hours).
OLS estimation of the preceding equation yields
ln(mining)t=-5.76+0.81ln(GDP_m)t+0.21ln(exports)t-0.09ln(energy)t
t-stat = (-3.82) (12.76) (3.53) (-2.49)
p-value = (0.001) (0.000) (0.001) (0.017)
R2=0.8905 n = 37 Durbin-Watson stat = 0.98
a) Use the p value approach to find out whether energy contributes negatively to mineral exploitation at the 5% level. Hint: specify the 5+1 steps.
b) Use formula in Appendix to calculate adjusted R2.
c) What does adjusted R-squared imply?
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