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

Methodology, What methodology will be suitable to use for a doctoral resea...

What methodology will be suitable to use for a doctoral research proposal thesis(The impact of persistent poverty on rural urban migration in Nigeria)?

Marginal revenue function, A firm has the certain total revenue (TR) functi...

A firm has the certain total revenue (TR) function:      TR=(4Q+2) e 4Q where Q  is Quantity      Find the firm's marginal revenue function.

Indifference curves, Assume that the allowance Peter receives from parents ...

Assume that the allowance Peter receives from parents is his only income.  He used to spend $30 a month to buy Coke at $.60 per can.  Coke is an inferior good for Peter.  Further a

Determine the interest rate, Assume that Jane spends her entire income of $...

Assume that Jane spends her entire income of $100 on two goods,  x  and  y.  Moreover, these goods are perfect complements for her.  Let the price of good  x  go up while the price

#title.Structural Variance Auto Regression, Can you explain the basic intro...

Can you explain the basic introduction of this methodology?

Quantile regression coefficients, Consider the study of the effect of publi...

Consider the study of the effect of public-sponsored training programs. As argued in public programs of training and employment are designed to improve participant's productive ski

Total differential of the tr , A  firm's  total  revenue (TR)  is  prov...

A  firm's  total  revenue (TR)  is  provided by  pq, where  p  is  price  and  q  is  quantity sold. Assume the  firm  is  initially  selling  1000  units  of  its  product at  a

Pigouvian, In the United States, a buyer of a new electric is eligible for ...

In the United States, a buyer of a new electric is eligible for a one-time federal income tax credit of up to $4,000. Show the effect of this tax credit graphically, assuming the $

Goal for development, How can a person achieve his goal for development?Exp...

How can a person achieve his goal for development?Explain it with 5 examples.

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