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

Course work, estimate the determinants of demand of a firm or several firms...

estimate the determinants of demand of a firm or several firms within a particular industry or country

Find the best choice, Paul's utility function is u(x, y) = xy 2 . Let unit ...

Paul's utility function is u(x, y) = xy 2 . Let unit prices be given by  Px = 6 cents,  Py = 2 cents, and assume that Paul's budget is the same as Peter's from the previous problem

Quizzes., Hello, I have an online economics quizzes. three quizzes each qui...

Hello, I have an online economics quizzes. three quizzes each quiz 50 questions for 1.5 hour. its on R. Glenn Hubbard and Anothony Patrick O''Brien- Microeconomics, 4th Ed.I did th

Identification problem, #question.elaborate the different methods for the e...

#question.elaborate the different methods for the estimation of simultaneous equation model in case of exact and over identification?

T-ratio test, about t-ratio test under multicolinarity

about t-ratio test under multicolinarity

Procurement, You are a logistics consultant for a rapidly growing online re...

You are a logistics consultant for a rapidly growing online retail company. They plan to expand their operations to a new geographical region.Task: Develop a comprehensive logistic

What do you understand by simultaneity bias, (a) What is a white noise pro...

(a) What is a white noise process? (b) Distinguish between exogenous and endogenous variables, using examples. (c) What do you understand by simultaneity bias and can OLS

Popularity vs. true quality-models and analysis, Popularity vs. True Qualit...

Popularity vs. True Quality What determines the popularity of YouTube videos? Are the most viewed videos really the ones people like the most? What drives people choose certain

Determine the demand functions, The town of Dusty View, Saskatchewan has on...

The town of Dusty View, Saskatchewan has only two residents - Justin and Sarah - and has a water supply shortage in the summer. The municipal water utility charges a break even pri

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