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Assignment_4_Fall_2011 - FIN 271 FALL 201 DR R SOYER...

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FIN 271 DR. R. SOYER FALL 201 " Assignment 4 PART I: Monthly Change in Earnings Index for British Workers In this assignment we will be interested in modeling the monthly change in earnings index (CEAR) for British workers over the period of January 1989 to October 2004 using a regression model. The time-series data is available in the file "UKEAR.TXT". The data consist of the following variables: Change in earnings index (CEAR), unemployment rate (UNEMP), inflation rate (INFL) and political party in power (PARTY). The independent variable PARTY takes a value 1 if the Labor party is in the government during a period and the value 0 if the Conservative party is in the government. In any statistical inference you can use a level of significance 0.05. α œ (a) Estimate the regression model CEAR by using the other three variables as independent variables, that is, estimate the model CEAR UNEMP INFL PARTY . > ! " > # > $ > > œ " " " " % Discuss if all three variables are significant at 0.05. α œ
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