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

Financial payments technology, Suppose the money supply process is now repr...

Suppose the money supply process is now represented by the following function: where m measures the sensitivity of money supply with respect to the interest rate. (i) Us

What is the probability that they all hit the target, QUESTION ONE. (a) ...

QUESTION ONE. (a) The probability that, a bomber hits a target on a bombing mission is 0.70 Three bombers are sent to bomb a particular target. (i) What is the probability

Latin Square design, what is the the Latin Square design? What is its appli...

what is the the Latin Square design? What is its application in research? please explain this term with very simple but with detailed explanation for effective understanding. I hav

Hypothesis, What is a null hypothesis? ..

What is a null hypothesis? ..

Root mean square deviation, Root Mean Square Deviation The standard d...

Root Mean Square Deviation The standard deviation is also called the ROOT MEAN SQUARE DEVIATION. This is because it is the ROOT (Step 4) of the MEAN (Step 3) o

Empirical mode, Empirical Mode Where mode is ill-defined, its value may...

Empirical Mode Where mode is ill-defined, its value may be ascertained by the following formula based upon the empirical relationship between Mean, Median and Mode: Mode = 3

#regression, #regression line drawn as Y=C+1075x, when x was 2, and y was 2...

#regression line drawn as Y=C+1075x, when x was 2, and y was 239, given that y intercept was 11. calculate the residual

T test, What is an example of a real life situation when I would use each o...

What is an example of a real life situation when I would use each of these test

Find the optimal adaptive meshes for a skewed beta density, Show that the I...

Show that the ISB in a bin containing the origin of the double exponen-tial density, f(x) = exp(-|x|)/2, is O(h 3 ); hence, the discontinuity in the derivative of f does not have a

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