Using Y as the dependent variable and X1, X2, X3, X4 and X5 as the explanatory...

Using Y as the dependent variable and X1, X2, X3, X4 and X5 as the explanatory variables, formulate an econometric model for data that is (i) time series data (ii) cross-sectional data and (iii) panel data – (Hint: please specify the specific model here not its general form).

Solutions

Expert Solution

*An econometric model involving time series data

Yt = B1+B2X1t + B3X2t+B4X3t+B5X4t+ B6X5t+ut

Yt = Dependent variable or explained variable.

B1= intercept.

X1t,X2t+X3t+X4t+X5t = Explanatory Variables.

B2, B3, B4, B5 , B6 = coefficients of X1t, X2t, X3t, X4t, and X5t

ut = random error term or stochastic error term.

( Time series data consists of observations collected at specific intervals of time. So t subsrict will be a must in the model.)

2).An econometric model involving cross sectional data .

Yi = B1+B2X1i+ B3X2i+B4X3i+B5X4i+B6X5i+ui

Yi = Dependent variable

B1 = intercept

X1i, X2i, X3i, X4i, X5i = Explanatory Variables.

B2,B3,B4,B5,B6. - Coefficients of X1i, X2i, X3i, X4i, and X5i

ut = Random error term.

( Cross section data is collected from different individuals or groups at a point of time. Subcript used in the model is 'i'. )

* Econometric model involving panel data.

Yit = B1+B2X1it +B3X2it+B4X3it+B5X4it+B6X5it+ut

Yit =Development variable.

B1= intercept

X1it,X2it, X3it, X4it,X5it = Explanatory Variables

B2,B3,B4,B5,B6 = coefficients of X1it,X2it,X3it,X4it and X5it

ut = random error term.

( Panel data is actually cross sectional data surveyed in over time. So subcripts 'i' and 't' will be there.)

Rahul Sunny answered 5 months ago

Next > < Previous

Related Solutions

The values of X1, X2, X3, X4 and X5 are .1, .2, .08, .2 and .3....

The values of X1, X2, X3, X4 and X5 are .1, .2, .08, .2 and .3. Explicate the meaning of those numbers for the Z score. What are the prospects of this firm? Discuss thoroughly.

Using the data, determine whether the model using (x1, x2, x3, x4) to predict y is...

Using the data, determine whether the model using (x1, x2, x3, x4) to predict y is sufficient, or should some or all other predictors be considered? Write the full and reduced models, and then perform the test. Show your work and state your conclusion, but you do not need to specify your hypothesis statements. y 60323 61122 60171 61187 63221 63639 64989 63761 66019 67857 68169 66513 68655 69564 69331 70551 x1 83 88.5 88.2 89.5 96.2 98.1 99 100...

Case Y X1 X2 X3 X4 X5 X6 1 43 45 92 61 39 30 51...

Case Y X1 X2 X3 X4 X5 X6 1 43 45 92 61 39 30 51 2 63 47 73 63 54 51 64 3 71 48 88 76 69 68 70 4 61 35 86 54 47 45 63 5 81 47 85 71 66 56 78 6 43 34 51 54 44 49 55 7 58 35 70 66 56 42 67 8 71 41 64 70 57 50 75 9 72 31 81 71 69 72 82...

Let X1, X2, X3, X4, X5, and X6 denote the numbers of blue, brown, green, orange,...

Let X1, X2, X3, X4, X5, and X6 denote the numbers of blue, brown, green, orange, red, and yellow M&M candies, respectively, in a sample of size n. Then these Xi's have a multinomial distribution. Suppose it is claimed that the color proportions are p1 = 0.22, p2 = 0.13, p3 = 0.18, p4 = 0.2, p5 = 0.13, and p6 = 0.14. (a) If n = 12, what is the probability that there are exactly two M&Ms of each...

Let U = {(x1,x2,x3,x4) ∈F4 | 2x1 = x3, x1 + x4 = 0}. (a) Prove...

Let U = {(x1,x2,x3,x4) ∈F4 | 2x1 = x3, x1 + x4 = 0}. (a) Prove that U is a subspace of F4. (b) Find a basis for U and prove that dimU = 2. (c) Complete the basis for U in (b) to a basis of F4. (d) Find an explicit isomorphism T : U →F2. (e) Let T as in part (d). Find a linear map S: F4 →F2 such that S(u) = T(u) for all u ∈...

Let X1, X2, X3, X4, X5 be independent continuous random variables having a common cdf F...

Let X1, X2, X3, X4, X5 be independent continuous random variables having a common cdf F and pdf f, and set p=P(X1 <X2 <X3 < X4 < X5). (i) Show that p does not depend on F. Hint: Write I as a five-dimensional integral and make the change of variables ui = F(xi), i = 1,··· ,5. (ii) Evaluate p. (iii) Give an intuitive explanation for your answer to (ii).

The prices of inputs (x1,x2,x3,x4) are (4,1,3,2): (a) If the production function is given by f(x3,x4)...

The prices of inputs (x1,x2,x3,x4) are (4,1,3,2): (a) If the production function is given by f(x3,x4) =min⁡{x1+x2,x3+x4} what is the minimum cost of producing one unit of output? (b) If the production function is given by f(x3,x4)=x1+x2 +min⁡{x3+x4} what is the minimum cost of producing one unit of output?

For the table below, if Y is the dependent variable and X1 and X2 are the...

For the table below, if Y is the dependent variable and X1 and X2 are the independent variables. Using the linear regression equation Y=-0.45X1-1.34X2+15.67, which observation has the largest absolute residual? Observation number Actual Y x1 X2 1 4.5 6.8 6.1 2 3.7 8.5 5.1 3 5 9 5 4 5.1 6.9 5.4 5 7 8 4 6 5.7 8.4 5.4 The first observation The third observation The fifth observation The second observation

For the table below, if Y is the dependent variable and X1 and X2 are the...

For the table below, if Y is the dependent variable and X1 and X2 are the independent variables. Using the linear regression equation Y=-0.45X1-1.34X2+15.67, find the Sum of Squared Residuals? (choose the best answer) Observation number Actual Y x1 X2 1 4.5 6.8 6.1 2 3.7 8.5 5.1 3 5 9 5 4 5.1 6.9 5.4 5 7 8 4 6 5.7 8.4 5.4 2.57 2.97 3.2 3.5

4. Determine the number of integer solutions of x1 + x2 + x3 + x4 =...

4. Determine the number of integer solutions of x1 + x2 + x3 + x4 = 17, where a. xi ≥ 0, 1 ≤ i ≤ 4 b. x1, x2 ≥ 3 and x3, x4 ≥ 1 c. xi ≥ -2, 1 ≤ i ≤ 4 d. x1 , x2 , x3 > 0 and 0 < x4 ≤ 10

Subjects