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31 views

Exercises

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abrhammengistusecond
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ECONOMETRICS EXERCISES

1. Determine the type of data of the following variables:


A-Ethiopian monthly salaries in the time period 1980-2005.
b. Gender distribution in each of the CBE branches of Ethiopia in 2010.
c- Inflation rate in each of the African countries in 2008.
d- R&D expenditure in each of the European Union member states in 2003.
e- Yearly automobile production in France, Italy and Spain in the time period 1980- 2010.
f- Yearly race distribution in the United States during the last 20 years.
g- Monthly water consumption during the 20th century in the city of Addis Ababa.

2. We have the following information regarding the average growth rates of employment (Y) and real
GDP (X) for 25 OECD countries for the period 1988-2007:

Y̅ = 0.83 X̅ = 2.82 =∑(Y − Y̅ )2 =∑yi2=14.57 = ∑ε̂ i2 =6.12

∑(Y − Y̅ )(X − X̅ ) = ∑y x =29.76

∑(X − X̅ )2 =∑xi2 = 60.77 , =1 ,…, 25

a- Find the regression coefficients for a regression model that investigates the behavior of Y
through the behavior of X.
b- Interpret your regression coefficients.
c- Find and interpret the value of the determination coefficient.
d- Calculate the predicted Y when X=3.15.
e- Calculate ESS.

3. We have annual data, from 1963 until 1972, about the amount of money in a country ( ) and the
national income ( ), in million Euros that can be summarized in the following:

∑ = 37.2 ∑ 2= 147.18 ∑ = 295.95 ∑ = 75.5 ∑ 2= 597.95

a- Could you specify a linear regression model representing the theory that states that the national
income is determined by the amount of money in a country?
b- Think about possible factors contained in error ( )of your econometric specification representing
the above theory.
c- Find the OLS estimated values for the parameters of your econometric model and interpret your
results.

4. In the table below, U denotes the unemployment rate and I the inflation rate in six American
countries in 2011.

Country U I

Mexico 5.2 3.4


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Argentina 7.2 9.5

Brazil 6.0 6.6

Chile 6.6 3.3

Colombia 10.8 3.4

Venezuela 8.2 26.1

a- Determine whether the data is a time series, a cross sectional data or panel data.
b- Draw a scatter plot with the data of the table. Interpret your graph.
c- Calculate the correlation coefficient (U, I) and interpret your result.
d- Calculate a new correlation coefficient eliminating the Venezuelan observation and interpret your
result.

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