Estimate the values of the dependent variable, Applied Statistics

Assignment Help:

1. Suppose you are estimating the imports (from both the U.S. mainland and foreign countries) of fuels and petroleum products in Hawaii (the dependent variable). The values of the dependent variable from 1958 to 2008 are provided in the attached EXCEL file. According to economic theory, imports are affected by total personal income or disposable personal income. In addition, since Hawaii's energy consumption is mainly rely on imported crude oil, the prices of crude oil should also affect the values of imported fuels and petroleum products. The historical data of some potential independent variables (some are relevant, some are irrelevant) from 1958 to 2008 are also provided in the EXCEL file. Based on these data, please do the following:

a. Develop a linear or log-linear (double-log or convert both the DV and the IVs into LN(Y) and LN(X1), LN(X2)...) regression model to estimate the dependent variable based on the data provided in the EXCEL file. Select the independent variables (only include the relevant variables) and the forms (linear or log-linear). [Hint: you should try alternative combinations of independent variables and the regression model with highest Adjusted R Squared Value and all significant independent variables (the P-values of the independent variables should be less than 0.1) should be selected as the best model.] Run the regression models using data from 1958 to 2008.

b. Estimate the values of the dependent variable from 2006 to 2008 using your regression models (both linear and log-linear) and the values of the independent variables provided in the EXCEL file.

c. Calculate the forecasting errors from 2006-2008 based on the mean of absolute errors (MAE) [also called mean absolute deviation or MAD]. The MAE is calculated as follows: first calculate the forecast errors (the actual value of the dependent variable minus the forecasted values of the dependent variable) in each year (2006-2008), and then calculated the average values of the absolute values of the errors. Based on the MAE, which model do you recommend?

d. Run a regression using crude oil price as the only independent variable. Assuming crude oil price in 2009 and 2010 will be $70/BBL and $80/BBL, respectively, forecast the imports of fuels and petroleum products in Hawaii in 2009 and 2010.


Related Discussions:- Estimate the values of the dependent variable

Determine how the ordinary least squares, Question Following the general...

Question Following the general methodology used by econometricians as explained in the session for week 1 (eight steps), explain how you would proceed to determine if a good com

Kurtosis and skew, how to interpret results, a good explanation to help me ...

how to interpret results, a good explanation to help me understand.

Pneumatic actuator design matrix, Pneumatic Actuator Design Matrix: The ra...

Pneumatic Actuator Design Matrix: The range of actuator design parameters have been provisionally assessed and are presented in Table. You are required to determine the following

Types of sampling, Given a certain population there are various ways in whi...

Given a certain population there are various ways in which a sample may be drawn from it. The chart below illustrates this point: Figure 1 In  Judgem

Find the probability customers pay their bill in full, The proportion of Am...

The proportion of American Express credit-card holders who pay their credit card bill in full each month is 23%; the other 77% make only a partial or no payment. (a) In a random

B) Distinguish between:, X 110 120 130 120 140 135 155 160 165 155 ...

X 110 120 130 120 140 135 155 160 165 155 Y 12 18 20 15 25 30 35 20 25 10

Skewness, Skewness Meaning and Definition  Literal meaning of skew...

Skewness Meaning and Definition  Literal meaning of skewness is lack of symmetry; it is a numerical measure which reveals asymmetry of a statistical series. According t

Simplex method, #questionMaximize Z= 3x1 + 2X2 Subject to the constraints: ...

#questionMaximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0..

Econometrics, The following data on calcium content of wheat are consistent...

The following data on calcium content of wheat are consistent with summary quantities that appeared in the article “Mineral Contents of Cereal Grains as Affected by Storage and Ins

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