E-views, Econometrics

Assignment Help:

The following table gives data on the Consumer Price Index (CPI) and the Standard & Poor (S&P)
company''s index of 500 common stock prices.
Year CPI Index S&P 500 Index
1978 65.2 96.02
1979 72.6 103.01
1980 82.4 118.78
1981 90.9 128.05
1982 96.5 119.71
1983 99.6 160.41
1984 103.9 160.46
1985 107.9 186.84
1986 109.6 236.34
1987 113.6 286.83
1988 118.3 265.79
1989 124.0 322.84
Source: Economic Report of the President, 1990
A. Import the above data into E-Views. Plot the data on a scattergram with the S&P index on the
vertical axis and CPI on the horizontal axis. This is the second item on your printout for this
homework. Is this data time series, cross sectional, or pooled? Explain!
B. What can you say about the relationship between the two indexes?
C. Consider the following regression model:
Equation 1: (S&P)t = ?0 + ?1CPIt + ?t
(i) Using the data above, construct a table like the one shown in section 2.1.3 on page 39 in
Studenmund and use your calculations to manually compute the regression coefficients
in Equation 1 above (Hint: follow the method described in section 2.1.3).
(ii) Use OLS in E-views to estimate Equation 1 with the above data. Your E-Views output is
the third item on your printout for this homework. Are the results the E-views reports
different from the ones you obtained through the manual computation? Interpret the
coefficient estimates.
(iii) Do the results obtained in part (ii) above make economic sense?
D. What is the R2 of the estimated regression equation (highlight this on your E-views output)?
Given the type of data you used to estimate equation (1) does the R2 indicate an excellent fit, a
good fit, or a bad fit? Explain!

Related Discussions:- E-views

Educational investment decision, cost benefit decision invest in college un...

cost benefit decision invest in college undergraduate 5 years

Pricing, what is the importance of price

what is the importance of price

Time-series econometrics, Suppose time-series data has been generated accor...

Suppose time-series data has been generated according to the following process: where t is independent white noise. Our main interest is consistent estimation of Φ from r

Long-run equilibrium solution, Suppose a small open economy is characterise...

Suppose a small open economy is characterised by the following equations/information:             Y =6K 0 L 1-α             K 0 = 30,000             L 0 = 10,000

Determine the amount of the money, You are gambling. There is a white urn i...

You are gambling. There is a white urn in front of you, which contains a total of 100 black and white balls. You are blindfolded, get to pick one ball randomly, and see which color

Calculate the elasticity of the premium, You are a property insurer and one...

You are a property insurer and one of your potential clients, whose current wealth is $450,000, wants to insure her $250,000 house.  The chances of the house burning down in any gi

HR, the following are the weekly amounts of welfare payments made by the fe...

the following are the weekly amounts of welfare payments made by the federal government to a sample of six families: $139, $136,$130,$136,$147and$136.what is the range

Explain the meaning of regression, Problem 1: a. Explain the meaning o...

Problem 1: a. Explain the meaning of regression and its usefulness. b. Distinguish between GARCH (1, 1) and asymmetric GARCH. c. Clearly explain the two tests used for

Explain the concept of cointegration, Problem 1: (a) Using examples exp...

Problem 1: (a) Using examples explain the concept of cointegration. (b) Explain the term ‘stationarity' and its importance. (c) Differentiate between stochastic and determinist

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd