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AEA

Itt - o \- o J

EC 1I7 - INTRODUCTION TO ECONOMETRICS DEPARTMENT OF ECONOMICS

17,2009 EXAM # 1, January be sureto areneeded, AII answersshould be written on the blue book. If calculations given after question is point each value of . The your answer clearlyshowhow you obtained is 100.Goodluck! Thetotal score thequestion. only if aretrueor false.Givea brief explanation thefollowing statements whether 1. State your answer is false.(3 points) methodsyield different formulasto Likelihood and LeastSquares Maximum a) The model. of a multiple linearregression the parameters estimate modelis not required of a linear regtession residuals the on assumption b) Thenormality is conducted. whena testof hypothesis is alsozero. F-statistic calculated is zero, c) WhenR-squared variablein a that thecoefficientofthe independent thenull hypotheses d) If you rejected model is not statisticallydiflerent from zero using the test simple linear regression using the then it is possibleto accep the samenull hypothesis statisticapproach, intervalaPProach. confidence that all the actual Yi it is possible estimation, regression e) In anOrdinaryLeastSquares line. simpleregression valueswould lie abovethe estimated feet) of square to relatehomesize(X, in hundreds wishes building contractor 2. A residential pesos).The ANOVA table showsthe resultsafter a to his materialcost(Y, in thousand jobs of completed arc analyzed. random sample SOURCE Regression Error Total SS 2049.23 91.24 . 2140.47 df 1 90 2l

(2 points) werein the sample? a) How manyhouses that X and Y the hypothesis b) Computethe test statisticthat would be usedto evaluate (5 points) arenotlinearlyrelated, valueof d? (5 points) c) Whatis theestimated of the total variationin materialcostis dueto the influenceof home d-)Whatpercentage model?(3 points) sizein theregression all the Yt: cr+ FXt + ul which satisfies the simplelinearregression 3. Consider (5 linearmodel.Is the estimatorb:Vf; for B unbiased? of the classical assumptions points) leastsquares: thefollowingmodelvia ordinary plansto estimate 4. A researcher i:1,2,3,...tr Y i :a +b *X i +c*Z i f e i wher e

that Xi andei miSt is concerned The researcher


there is a problem, he proposesto do the fo

To decide whether or not

model and calculate a) Run ordinary Leastsquares(ols) on the multiple regression or effor term from the equation' the residuals be the calculatedresidualson Xi (i.e. the calculate{ residualswill b) ' Regressthe wtrile the Xi will be the independentvariable) dependentvariable is significantlydifferentfrom zeroat the regression If the slopecoefficientin the second Xi andei arelinearlyrelatedTd fut OLS is will conclude-that 0.05level,the researcher Why or why correct? procedure Is this suggested in tt e multipleregression. inappropriate not?(10Points) output: the followingregression 5. Consider =0 '2 0 3 3 +0 '6560X Yi

(0.1e61) (0.0e76) s.E.


R.squared:0.397

RSS:0.0544 ESS:0.0358 n:19cities . i:

rate(LFPR)of womennI972 where Y=laborforceparticipation X:LFPRofwomenin 1968' thatHo: Fz:l vs Ha: Bz>1'(5 points) Testthehypothesis
, ' ",4,, . J - - - *- _ ' .. a'* >+- - - : - - .- "=.+. :- .- -

usingqtffiWo^Aatafrom 1960to 1979 .q*Uo" wasobtained 6. The following estimatea +e Xl + 3'48X2 + 0'34X3 Y :2.20- 0.104 sE (3.4) (0,00s) Q,2) (0'1s) of goodl (kilogram) Y= quantitydemanded i X1 priceof good1 (pesos/kilogram) X2: monthlyincome(Pesos) X3 : priceof good2 (pesos/kilogram) was 112'5' and the the explainedsum of squares standardeffors are in parentheses, was 19'5 sumof squares residual of the multiple regression a) Interpretall the parameters Briefly explainyour answer'(5 or compleirents? b) Are goodl and good2substitutes points) aresignificantlydifferentfrom zeroat the coefficients c) which of the partialregression level?(15 Points) 95% significance coefficientsarenot significantlydifferent regression d) Make a joint testttrat all i#.f from zero.(10 Points) (5 points) for this regression' the R-square e) Calculate (5 points) R-square' D Calculatethe adjusted model' (10 points)

ta.s5,2[1.725 to.ozs,zo:2.086

to.os, rz:1.740 :2.110 to.azs,tt

tb.os, ro: I.746 = 2.120 to.ozs,ro

F-values : Selected Tabulated : 8.10 Fo.or (r,zo) : 4.35 Fo.os (r,zo) :5.29 Fo.or (:,ro : 5.18 Fo.os (r,rz) : 4.77 Fo.or (+,ro) :2.96 Fo.os (+,rz)