Econometrics assignment full work
- 1. 1. CONSUMPTIO N PRICE Mean 93.08862 1.293448 Median 90.68000 1.310000 Maximum 107.2000 1.830000 Minimum 83.39000 0.580000 Std. Dev. 6.826136 0.315349 Skewness 0.251560 -0.378902 Kurtosis 1.787736 3.027040 Jarque-Bera 2.081613 0.694791 Probability 0.353170 0.706526 Sum 2699.570 37.51000 Sum Sq. Dev. 1304.692 2.784455 Observations 29 29 2. CONSUMPTIO N 1.000000 -0.927608 PRICE -0.927608 1.000000 3. If consumptionincrease by1,thenprice decreasesby -0.927608 4. Price is dependentwhilesConsumptionisindependent.Reasonsbeenthat when the price increase, consumptiondecrease whileswhenconsumptiondecrease price increase. 5. Y=Bo+B1 (Price) +ϵ 6. DependentVariable:CONSUMPTION Method: LeastSquares Date: 10/23/19 Time:14:15 Sample:1984 2012 Included observations:29 Variable Coefficient Std. Error t-Statistic Prob. PRICE -20.07928 1.556171 -12.90301 0.0000 C 119.0601 2.069780 57.52310 0.0000 R-squared 0.860456 Mean dependentvar 93.08862 Adjusted R-squared 0.855288 S.D. dependentvar 6.826136 S.E. of regression 2.596733 Akaike info criterion 4.812858 Sum squared resid 182.0616 Schwarz criterion 4.907154 Log likelihood -67.78643 Hannan-Quinn criter. 4.842390 F-statistic 166.4876 Durbin-Watson stat 0.396221 Prob(F-statistic) 0.000000 Price coefficient=-20.07928, therefore ithaseffectonconsumptionsince itbearsanegative sign
- 2. 7. Ho=Price hasno effectonconsumptionHo:B1=0 H1=Price has effectonconsumptionH1:B1≠0 Therefore price hasaneffectonconsumption. 8. 86% of the changesin consumptionhasbeenexplainbythe model of regression 9. Y= Bo+B1(Price)+B2(Income)+ϵ 10. 11. DependentVariable:CONSUMPTION Method: LeastSquares Date: 10/23/19 Time:14:34 Sample:1984 2012 Included observations:29 Variable Coefficient Std. Error t-Statistic Prob. PRICE -9.405256 1.591110 -5.911129 0.0000 INCOME 0.001373 0.000173 7.956958 0.0000 C 88.38285 4.019852 21.98659 0.0000 R-squared 0.959377 Mean dependentvar 93.08862 Adjusted R-squared 0.956253 S.D. dependentvar 6.826136 S.E. of regression 1.427748 Akaike info criterion 3.647771 Sum squared resid 53.00004 Schwarz criterion 3.789215 Log likelihood -49.89267 Hannan-Quinn criter. 3.692069 F-statistic 307.0184 Durbin-Watson stat 1.776733 Prob(F-statistic) 0.000000 Consumption=88.38285, Income=0.001373, Price =-9.405256 Income hasno effectonthe consumptionwhilesPrice hasaneffectonconsumption. 12. YES, IT IS UNDERESTIMATED 13. 14. 15. R-Squaredexplainsthe explanatorypowerof the model whilesadjustedR-Squaredshowsthe numberof variablesaddedtothe model. R-Squared=95%, whichmeansthat95% of the changesinconsumptionhasbeenexplainbythe model of regression. 16. F-statisticsexplainsthe usefulnessof the model