1. Describe how one can test for structural breaks using (i) the dummy variable method and...

1. Describe how one can test for structural breaks using (i) the dummy variable method and (ii) the Chow test.

Solutions

Expert Solution

(1) dummy variable method

Let data on disposable income (X ) & saving ( Y) for a given period

Let we divide sample data in two periods

Rahul Sunny answered 7 months ago

Next > < Previous

Related Solutions

Explain in full how you will use a dummy variable regression to test for a structural...

Explain in full how you will use a dummy variable regression to test for a structural break. Also discuss the advantages of using a dummy variable regression over the Chow test when testing for structural break in data.

Using a correlation method, how can I explain scientific method steps to testing the validity of...

Using a correlation method, how can I explain scientific method steps to testing the validity of the folk wisdom idea saying "the early bird catches the worm". My theory is "You will have an advantage and be successful if you start early before anyone else does". i need at least 100 words. please help me.

What is a dummy variable? If we use one on the right-hand side of the equation...

What is a dummy variable? If we use one on the right-hand side of the equation in a multivariate analysis, what are the implications for interpreting the constant? What is multicollinearity? How do we know if we have it in our models? How do we correct for it if we do? What is hetereskedasticity? Should we really be concerned about it? Why or why not?

How do you interpret coefficients if the dependent variable is a dummy variable? (e.g. what would...

How do you interpret coefficients if the dependent variable is a dummy variable? (e.g. what would the coefficients for "income," "years of education," or "height" mean if the dependent variable was the dummy variable, "Famous?"? 2. Suppose you applied a scalar to a variable. Then you used both the original variable and the scaled variable as explanatory variables. What would happen and why?

1-what is the dummy variable and what is the purpose of included in regression model ?...

1-what is the dummy variable and what is the purpose of included in regression model ? 2- explaining the meaning of adjust r square? 3-if adjust r square computed. would it be higher , equal of lower than value of r square?

Describe how T1 and T2 can be used in determining the structural features of polymers.

how can power and confidence of results be increased using t test ( one sample t...

how can power and confidence of results be increased using t test ( one sample t test, 2-independent and paired samples t test).

Using Excel to Construct event dummy (or binary) variables to represent three international events : (i)...

Using Excel to Construct event dummy (or binary) variables to represent three international events : (i) The Asian financial crisis – one from Aug 1997 to Jul 1998, zero otherwise. (ii) The Global Financial Crisis (GFC) – one from Feb 2007 to Feb 2009, zero otherwise. (iii) Covid-19– one from Jan 2020 to Mar 2020, zero otherwise.

1. WHEN I RUN THE CODE AT FIRST AND I SELECT THE RETURN OPTION, IT BREAKS....

1. WHEN I RUN THE CODE AT FIRST AND I SELECT THE RETURN OPTION, IT BREAKS. BUT WHEN I SELCT THE RETURN OPTION AFTER I BORROW A BOOK, IT WORKS 2. WHY IS MY ARRAYLIST NO SAVING? WHAT I MEAN IS THAT AFTER I BORROW A BOOK AND I END THE SYSTEM, WHEN I RESTART IT, THE BOOK I BORROWED IS STILL AVAILABLE 3.ALSO ANY IDEAS ON WHAT MY TEST CASES COULD BE? /* * To change this license header,...

Describe any issues with validity and reliability that can arise using qualitative method. Explain how you...

Describe any issues with validity and reliability that can arise using qualitative method. Explain how you would address those issues in your experiment.

Subjects