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Dept. of Economics
D. Steigerwald
Economics 241B
Matlab Problems
Question 1
This exercise studies the effect of terrorist acts on the tourism of Country A.
Artificial data has been simulated, and can be found on the class website.
The data set is
organized as follows:
Column
Variable
Description
1
TOUR
t
The number of tourists that visited Country A in
month t
2
SUM
t
Summer month dummy variable (1 = summer
month, 0 = nonsummer month)
3
TERROR
t
The number of terrorist attacks in Country A
during month t
4
TERROR
t1
The number of terrorist attacks in Country A
during month t1
5
HOTEL
t
The average daily hotel rate for Country A in
month t
Consider the population model
t
t
t
t
t
t
u
HOTEL
TERROR
TERROR
SUM
TOUR
+
+
+
+
+
=
−
4
1
3
2
1
0
β
.
a)
Briefly discuss whether or not the classical OLS assumptions are credible in this
model.
d)
Test the individual hypotheses that the coefficients are equal to zero.
Test the
hypothesis that terrorist acts do not influence the number of tourists who visit Country A.
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This note was uploaded on 12/26/2011 for the course ECON 241b taught by Professor Staff during the Fall '08 term at UCSB.
 Fall '08
 Staff
 Economics

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