are106-homework-4

are106-homework-4 - Econometrics Homework 4 ARE 106 Winter...

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ARE 106 Econometrics Homework 4 Winter 2010 A. Havenner Read the Engel curve application in section 3.7 in the text and examine the annotated computer output provided earlier (on the web page) and the output in the book on pages 107-109. You should run Practice Computer Session 3.3 is associated with this example. It uses input command file ps3-3.inp (which automatically reads data3-2). Be sure you can link the items on the computer output to the things discussed in class. However, the output from this run is not related to the questions below, and you need not turn anything in for this part. I just want you to follow exactly the logic in the book. Computer Problems: 1. Many economic variables grow more or less with time. The data on annual US patents and research and development (R&D) expenditures from 1960 - 1993 in data3-3 are an example. The patents are measured in thousands, while the R&D expenditures are in billions of dollars; a series giving the year is also provided. See "DatalRead info" for details. Use this dataset to answer the following questions: [5] (i) Suppose we are interested in forecasting patents, and we are considering using time (YEAR) as the regressor. Graphl the data to see how patents grow over time. Do you think the simple linear model will fit this data series very well, based on the plot? [5] (ii) Would the regression on time be your model of choice given only the information available in this dataset? Very briefly, why or why not? [6] aii) Run a regression relating patents to an intercept and the year, and report the results in standard format. What is the estimate of the regression intercept a? In what units is it measured (e.g., dollars? percent? some other?)? What is the estimate of the slope~? In what units is it measured?
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This note was uploaded on 03/18/2010 for the course ARE 106 taught by Professor Havenner during the Winter '09 term at UC Davis.

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are106-homework-4 - Econometrics Homework 4 ARE 106 Winter...

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