What econometric problems seem to exist in this equation

Reference no: EM13456103

You are hired by farmer vin, a famous producer of bacon and ham, to test the possibility that feeding pigs at night allows them to grow faster than feeding them during the day. You take 200 pigs(from new-born piglets to extremely old porkers) and randomly assign them to feeding only during the day or feeding only at night and, after six months, end up with the following(admittedly very hypothetical) equation: W ^i=12+3.5Gi+7.0Di-0.25Fi (1.0) (0.10) t= 3.5 7.0 -2.5 R ¯^2= 0.70 N=200 DW=0.50 Where: Wi= the percentage weight gain of the ith pig. Gi= a dummy variable equal to 1 if the ith pig is a male, 0 otherwise. Di= the dummy variable equal to 1 if the ith pig was fed only at night, 0 if only during the day. Fi= the amount of food(pounds) easten per day by the ith pig.

a. Test for serial correlation at 5- percent level in this equation

b. What econometric problems appear to exist in this equation?(hint: be sure to make and test appropriate hypotheses about the slope coefficients.)

c. The goal of your experiment is to determine whether feeding at night represents a significant improvement over feeding during the day. What can you conclude?

d. The observations are ordered from the youngest pig to the oldest pig, does this information change any of your answers to the previous part of this question? Is this ordering a mistake? Explain your answer.

Reference no: EM13456103

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