Reference no: EM132397944
Assignment : ECON Statistical Methods
Using the attached data set, answer the following using excel:
1. Explain why you would not include some variables in the regression analysis.
2. What is the final model? Dependent and independent variables explained.
3. Explain the use of dummy variables (if used).
4. Explain if you naturalize the data and why?
5. Explain the use of a time trend (t for linear, tsq for quadratic) and why?
6. Show the results for your final model.
7. Plot and briefly discuss the residual.
Variables in the file are:
STATE = state name
ST_ABB = state abbreviation
YR = year
P_CAP = public capital
HWY = highway capital
WATER = water utility capital
UTIL = utility capital
PC = private capital
GSP = gross state product
EMP = employment
UNEMP = unemployment rate
Important:
See Baltagi (2001, p. 25) for analysis of these data. The article on which the analysis is based is Munell, A., "Why has Productivity Declined? Productivity and Putlic Investment," New England Economic Review, 1990, pp. 3-22. The data were downloaded from the website for Baltagi's text.
Attachment:- Data Set.rar