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Introduction to Econometrics 3rd Edition by James Stock, Mark Watson
Edition 3ISBN: 978-9352863501Introduction to Econometrics 3rd Edition by James Stock, Mark Watson
Edition 3ISBN: 978-9352863501 Exercise 7
Using the data set Growth described in Empirical Exercise , but excluding the data for Malta, carry out the following exercises.
a. Construct a table that shows the sample mean, standard deviation, and minimum and maximum values for the series Growth, TradeShare, YearsSchool, Oil , Rev_Coups, Assassinations, RGDP60. Include the appropriate units for all entries.
b. Run a regression of Growth on TradeShare, YearsSchool, RevjCoups, Assassinations and RGDP60. What is the value of the coefficient on RevjCoupsl Interpret the value of this coefficient. Is it large or small in a real-world sense
c. Use the regression to predict the average annual growth rate for a country that has average values for all regressors.
d. Repeat (c) but now assume that the country's value for TradeShare is one standard deviation above the mean.
e. Why is Oil omitted from the regression What would happen if it were included
Empirical Exercise
On the text Web site http://www.pearsonhighered.com/stock_watson/ , you will find a data file Growth that contains data on average growth rates from 1960 through 1995 for 65 countries along with variables that are potentially related to growth. A detailed description is given in Growth_Description, also available on the Web site. In this exercise, you will investigate the relationship between growth and trade. 3
a. Construct a scatterplot of average annual growth rate ( Growth ) on the average trade share ( TradeShare ). Does there appear to be a relationship between the variables
b. One country, Malta, has a trade share much larger than the other countries. Find Malta on the scatterplot. Does Malta look like an outlier
c. Using all observations, run a regression of Growth on TradeShare. What is the estimated slope What is the estimated intercept Use the regression to predict the growth rate for a country with a trade share of 0.5 and with a trade share equal to 1.0.
d. Estimate the same regression excluding the data from Malta. Answer the same questions in c.
e. Where is Malta Why is the Malta trade share so large Should Malta be included or excluded from the analysis
a. Construct a table that shows the sample mean, standard deviation, and minimum and maximum values for the series Growth, TradeShare, YearsSchool, Oil , Rev_Coups, Assassinations, RGDP60. Include the appropriate units for all entries.
b. Run a regression of Growth on TradeShare, YearsSchool, RevjCoups, Assassinations and RGDP60. What is the value of the coefficient on RevjCoupsl Interpret the value of this coefficient. Is it large or small in a real-world sense
c. Use the regression to predict the average annual growth rate for a country that has average values for all regressors.
d. Repeat (c) but now assume that the country's value for TradeShare is one standard deviation above the mean.
e. Why is Oil omitted from the regression What would happen if it were included
Empirical Exercise
On the text Web site http://www.pearsonhighered.com/stock_watson/ , you will find a data file Growth that contains data on average growth rates from 1960 through 1995 for 65 countries along with variables that are potentially related to growth. A detailed description is given in Growth_Description, also available on the Web site. In this exercise, you will investigate the relationship between growth and trade. 3
a. Construct a scatterplot of average annual growth rate ( Growth ) on the average trade share ( TradeShare ). Does there appear to be a relationship between the variables
b. One country, Malta, has a trade share much larger than the other countries. Find Malta on the scatterplot. Does Malta look like an outlier
c. Using all observations, run a regression of Growth on TradeShare. What is the estimated slope What is the estimated intercept Use the regression to predict the growth rate for a country with a trade share of 0.5 and with a trade share equal to 1.0.
d. Estimate the same regression excluding the data from Malta. Answer the same questions in c.
e. Where is Malta Why is the Malta trade share so large Should Malta be included or excluded from the analysis
Explanation
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Introduction to Econometrics 3rd Edition by James Stock, Mark Watson
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