ECONOMETRICS, 01:220:322:13 Instructor: Adam Gulan Spring 2008 HOMEWORK #3 (due on 04/16/2008) Please answer all questions. I expect you to provide answers to all in-between questions and give a clear explanation of what you are doing and why, as well as to report all appropriate results and printouts. 1. You are asked to estimate an econometric model which would explain what are the possible factors which affect average test scores in Californian school districts. First, import the data to Eviews and save the workfile. The description of all variables is attached in the pdf file. a. Suppose you can construct a model with only one explanatory variable (and the constant). What would be your dependent variable? Which of the many possible explanatory variables would you choose. Which econometric/statistical criteria would guide you? Report the model which you think is the best one together with all measures upon which you made your choice. Is your explanatory variable statistically significant? Why or why not? What is the interpretation of the value of
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