{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

compex241b - University of California Dept of Economics D...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
University of California 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 = non-summer month) 3 TERROR t The number of terrorist attacks in Country A during month t 4 TERROR t-1 The number of terrorist attacks in Country A during month t-1 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 β β β β . a) Briefly discuss whether or not the classical OLS assumptions are credible in this model. b) Estimate the vector β by OLS and provide interpretations for the coefficients. c) Estimate the variance of B under the assumption that u t is homoskedastic and serially uncorrelated.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}