Econ400HW4 - Econ 400 – Economic Statistics Summer...

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Unformatted text preview: Econ 400 – Economic Statistics Summer Session II 2009 Prof. Mike Aguilar UNC at Chapel Hill HW#4 Due: Friday 7/10/09 @11:30am Students may work together, but each must turn in their own assignment. Assignments should be typed whenever possible. A hardcopy must be turned into me by the due date above. No late assignments will be accepted. Please show all work carefully. There may be more than one solution to each problem. 1) (3pts) Textbook #7.20 2) (3pts) Textbook #7.30 3) (14pts) Housing The economies of North Carolina and Nevada were two of the strongest in the nation, until the most recent recession. I want to know if there is a relationship between their housing markets. Gather data from FRED on housing prices for these two states from 1975 through the most recent period available. i. (2pts) Summarize the growth of housing prices in each state individually as well as jointly. Discussion and figures are required. ii. (2pts) Determine whether the home prices series each follow normal distributions. (A formal test is not required.) iii. (3pts) Construct a 95% confidence interval centered about the mean annual growth rate for each state. Interpret the meaning of these intervals. Note: Please construct the intervals without using the built‐in confidence interval commands. iv. (3pts) Some analysts believe the housing “bubble” began in 2004. Construct a 95% confidence interval for home prices for the periods 1975 through 2003, which is known as the “pre‐bubble” era, 1975 through 2006, and 1975 through the most recent data point. Discuss how your confidence interval changes by including the bubble and its bursting. Complete this exercise for both states. v. (4pts) Use 95% confidence intervals to determine whether the mean rate of home price growth was equal in the two states during the “pre‐bubble” era. Complete the same exercise over the entire sample. 6/17/2009 4:26 PM ...
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