1
University of California, Davis
Managerial Economic(ARE) 106, Summer 2009
Instructor: John H. Constantine
KEY
—Problem Set #6:
NOT DUE
NOTE:
You do NOT NEED TO RUN SHAZAM on this hw.
All SHAZAM computer outputs are
given at the end of this assignment if the problem has one.
The SHAZAM command files are given to
help you understand how to write the code.
You may be asked to state SHAZAM commands on the
final exam.
Problem 1
:
This is problem 9.2 of the text, although it is modified a bit
.
sample 1 229
read(are106/fullmoon.dat) calls t hol fri sat full new
ols calls t hol fri sat full new
test
test full=0
test new=0
end
stop
Do full moons cause strange behavior?
This is an important policy issue in terms of staffing hospitals
(doctors and nurses) and police.
Daily data were collected for the period January 1, 1998 until mid-
August.
There were 229 observations.
The variables are defined as follows:
calls
= emergency room cases
t
= trend variable 1, 2, …, 229
hol
= 1 if a holiday, 0 if not (New Year’s Day, Memorial Day, and Easter)
fri
= 1 if the day is a Friday, 0 if not
sat
= 1 if the day is a Saturday, 0 if not
full
= 1 if there is a full moon, 0 if not
new
= 1 if there is a new moon, 0 if not
(a)
Run the OLS using SHAZAM.
Interpret your results.
You are to state explicitly how each
variable will impact “calls”.
Note that most of these independent variables are “dummies”, and
the purpose here to have you understand dummies’ interpretations.
Part of this interpretation
requires a comment of the parameter statistical significance.
Considering each of the coefficients in turn, we have the following interpretations.
Intercept
:
At the beginning of the time period over which observations were taken, on a day which
is not Friday, Saturday or a holiday, and a day which has neither a full moon nor a half
moon, the average number of emergency room cases was 94.
t
:
The average number of emergency room cases has been increasing by 0.0338 per day.
holiday
:
The average number of emergency room cases goes up by 13.9 on holidays.
fri
and
sat
:
The average number of emergency room cases goes up by 6.9 and 10.6 on Fridays and
Saturdays, respectively.
fullmoon
:
The average number of emergency room cases goes up by 2.45 on days when there is a
full moon.
However, a null hypothesis stating that a full moon has no influence on the
number of emergency room cases would not be rejected.
newmoon
:
The average number of emergency room cases goes up by 6.4 on days when there is a
new moon.
However, a null hypothesis stating that a new moon has no influence on the
number of emergency room cases would not be rejected.