Essay Instructions: The Coursework should be done with SPSS or EXCEL
Write the exact title of the essay question at the top of your answer
Please see comments below in coloured font. I have also coloured in the bits you must NOT ignore.
**** Please do NOT approach this in terms of getting a part ‘done’ and then moving on to the next part. The parts relate to each other. When you have finished please go back and check the relationship of the parts to each other. The answers should be short (usually just one or two sentences) except for the last two parts. If you find yourself writing more please check
a. that what you have written does not really belong better in the last part
b. that you are not just writing out textbook material which has not been asked for (such as definitions). If you are asked to do a test or discuss a statistic it is assumed that you already know what it is.
Statistics and Econometrics: Project Work 2011-2012
This study requires each student to compile a sample of quarterly observations, in the UK, over a period of ten years. Thus, n=40. Each student will be given a specific period and area. You will collect data on these two variables:
(1) Birth rates (BR) (2) GDP per capita (GDP) ( If you can’t find GDP per capita for Northern Ireland use UK)
1. Present your data in a table showing the names of the variables. Make sure the full definitions and sources of each variable are given. [15 marks]
This must cover which table or URL was used, what deflator was used, how data was measured (e.g at constant prices etc.) , any methods used to solve problems..e.g. interpolation,
Use of a different variable from that asked for. Please bear in mind that there is often more than one measure of the same thing on a table so you need to be precise.
2. The equation to be estimated is :
BRi = b0 + b1 GDPi+ ui (i)
Answer these questions:
(i) In terms of the literature on demand for children, what would you expect to find for the coefficient on b1 ?
(ii) Explain how you would modify the model, implied by this equation, if there is an
‘Engel curve’ relationship in the demand for children.
(iii) Why is there a constant term in the equation with no variable attached?
(iv) Why do these types of equations have a ‘u’ term ?
3. Estimate equation (i) by OLS and present the results in a suitable table
(n.b. marks will be lost for simply pasting over the computer output)
(i) Comment on result for the coefficient on the GDP variable.
(ii) Comment on the R squared statistic.
(iv) Derive estimates of the income elasticity of demand for children from your results.
Please use correct formula the slope in a linear equation is not an elasticity (unless the data are in percentages)
4. Carry out the following hypothesis tests:
(i) b0=0 against the two sided alternative at the 1% level
(ii) b1=0 against the two sided alternative at the 5% level
(iii) b0<0 against the two sided alternative at the 5% level
(iv) b1<0 against the two sided alternative at the 5% level
Please make sure you do not make mistakes with your degrees of freedom. Also make clear what your conclusion is for the second part i.e. are you concluding, or not, that there is a signficiant negative relationship.
5. Differences in the pattern of births, over the calendar year, may cause serious problems with the accuracy of your results for this model. Outline the simple ‘seasonal dummy’ method of dealing with this and apply it to your data to produce a new set of results. [10 marks]
A lengthy explanation of the dummy method is not required. You simply need to make clear you you made your dummies. In this case you MUST also do a new regression.
6. Compare your new set of results (from Q.5) with your original results (from Q.3). You may consider the following to be relevant:
(i) whether the new model offers a significant improvement in goodness of fit.
(ii) assessing whether there has been any major change in estimated income elasticity.
(iii) assessing which quarters of the year tend to have, ceteris paribus, a higher or lower birth rate than others.
This is NOT a 3-part question. The 3 items are hints to help you and get you in the mood for doing the next part properly. As we do not know in advance what will happen it is possible that your regression has changed massively ??"e.g. the sign on GDP may have totally reversed and it may have gone from a statistically sig coefficient to insignificant or vice-versa.
7. You should now write a short report of 450-600 words. This should briefly summarize your findings but most of your answer should consist of further exploration of your data
(such as collecting further explanatory variables and estimating new regressions) and suggestions for improvement of the model you have estimated. [20 marks]
possible extensions-changing dependent variable., dividing sample, adding variables, more tests, explorations of residuals. To get good marks it is essential to add some new variables.
Ideally you should arrive at some ‘preferred’ equations and put these all in one table at the beginning of the new work- then discuss what is in the table rather than scatter a variety of new efforts through the text.
DO NOT SIMPLY REPEAT LARGE CHUNKS OF THE PREVIOUS ANSWERS AS YOUR SUMMARY OF PREVIOUS WORK AS YOU CAN NOT BE GIVEN MARKS AGAIN FOR DOING THE SAME WORK!!!
The summary of previous work should just highlight the state of knowledge so far- e.g.
Is GDP +ve , -ve , significant …? Is the model showing seasonality?
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Excerpt From Essay:
Essay Instructions: This course is based on econometric analysis and econometric method, especially k-Variable Linear Regression Mode;Time Series Models,GARCH/ARCH modeling.The chosen topic for the paper should be an interesting economic/finance/social question. Pure econometric papers, such as a comparison
of forecasting properties of models or an investigation of the finite sample properties of an estimator may be permitted. For example,like investigating different factors which will affect a kid's health using regression mode. The paper can be completely original or can base it on existing work using a different dataset and changing and/or expanding the analysis.The term paper should consist of an Introduction, Model Description, Results, and Conclusion with References included. All figures should be at the end of the paper.All mathematical equations should be written properly in the text. As an example consider the AR(1)-ARCH(1) model.
yt = ? + ?yt?1 + ²t
²t = ?tzt
t = ? + ?²2t?1
where zt ? iid(0, 1), and ?, ?, ?, and ?, are parameters to be estimated.
Data sources should be included, along with footnotes, and correct citations. The reference sourse are better from :
1. Journal of Applied Econometrics
2. Journal of Business and Economic Statistics
3. Empirical Economics
4. Review of Economics and Statistics
5. Journal of Empirical Finance
Excerpt From Essay:
Essay Instructions: I am a master student in the department of economics at the university of southern california (USC). I want to change my status from a master student to a Ph.D. student in the following semester (Fall 04)before completing my master degree. I was asked to write a statement of purpose to explain for the Ph.D. Admission Committee why I am applying to the Ph.D. program at USC and also I have to explain my fields of interest and why I choose this program and what I want to accomplish from this program.
These are my reasons:
1) Ever since I was a kid I dream of being an active member in my society. This dream encouraged me to work hard in order to enhance my knowledge and skills.
2)To be perfectly honest, this is not only to satisfy my ambition; a considerable amount of enthusiasm and determination for postgraguate studies is dedicated to my parents, who sacrified a great deal for me and my brothers and sisters. My family was extremely ecouraging and supportive, I want them to share my success, prestige, and better financial conditions.
3)As of my fields of interest, they are mainly concentrated on econometrics and financial economics. I have have special areas of favorite interest such as financial econometrics, incomplete market theory, and statistical properties of price fluctuation in finicial time series.
4)My interest is to be an econometrician and work in the area of financial markets to forcast, predict and model markets trends.
5)I have a B.Sc. degree in Physics with honor. Economic fluctuations can have many repercussions, and understanding fluctuations is a topic that many physicists have contributed to in recent years. Further, economic systems are examples of complex interacting systems for which a huge amount of data exist and it is possible that the experience that I gained from studying Physics might yield new results in economics.
6)the department of economics at USC is one of top three in econometric society fellows rankings.
7)For the past ten years, my country has developed a big financial market for stocks, bonds, and commodity market and they need such field of specialty.
8)I was granted a full scholarship from my government to get a Ph.D. in the field of econometrics. I will be the first student from my country to get a Ph.D. in this field of economics.
9) since I have a full scholarship, I will not ask for any type of financial aids because I want to devote myself for study and research.
Excerpt From Essay:
Essay Instructions: The task is to explain the article by Paul S. Heaton "Oil for what,illicit Iraqi Oil contracts and the UN Security Council"(I will send the article as an e-mail) to an intelligent person who does not know much about econometrics - perhaps a policy maker, newspaper reader or corporate executive. All of these topics should please be addressed,
1) What economic question does this article try to answer? What makes this question interesting or important?
2) What data this article use?
3) What econometric methods does the article use? What problems are these methods meant to solve?(For example, if the paper uses instrumental methods, why is an instrument needed? Try to explain the methods in a way that someone who has not taken this course could understand, but on the other hand, it should not be for a primary school student, do not forget you are talking to an intelligent, educated adult with sufficient math knowledge. You should use at least one of two equations, but please say what they mean.
4) What assumptions underly the methods used in the article? Again, try to explain the assumptions in a way that someone who has not studied econometrics could understand.
5) What conclusions does this article reach?
6) How credible are the results? Do you believe the assumptions? Do you think that the data and methods were appropriate for answering the question? If you find flaws in the assumptions, methods, data or reasoning, can you suggest ways to remedy the flaws?
Please do NOT just make a list of answers to the questions. It should be a coherent essay that explains the article answers the questions above along the way. I appreciate the help, thank you very much.
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Excerpt From Essay:
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