Econometric Analysis SPSS Regression Results

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This is my exam and I have to score at least 90% to pass the class

Consider the regression results of the models presented below. Please provide brief, yet cogent, answers to the prompt questions.

PROMPT QUESTIONS

NUMBER ONE [80 points]. Interpret the results of Model A.

● Is the Model a “good fit” for explaining GDP per capita? Explain.

● Which variables are doing a good job predicting GDP per capita? Explain.

NUMBER TWO. [80 points]. Interpret the results of Model B.

● What happened when we dropped the variable “Unemployment”?

● In what sense is Model B a better specification than Model A?

NUMBER THREE [80 points]. Interpret the results of Model C.

● What happened when we added the variable “Oil Revenue per Capita”?

● In what sense is Model C a better specification than Model B?

● Consider the variable “Public Debt,” it was not signficiant in Model A but it is highly significant in Model C. What should we conclude about the relationship between (y-variable) GDP per Capita and (x-variable) Public Debt? Explain.

NUMBER FOUR [80 points]. Interpret the results of Model D.

● What happened when we transformed the variable Trade Deficit into Trade Deficit per Capita?

● In what sense is Model D a better specification than Model A?

NUMBER FIVE [80 points]. Interpret the results of Model E.

● What is the biggest factor to take into account when comparing the results of Model E with the results of Model A?

● In what sense is Model E a better specification than Model A?

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FINAL EXAM March 2018 ECONOMICS 315WQ: Econometric Analysis and Report Writing Professor Frederick John Oerther III Western Oregon University Consider the regression results of the two models presented below. Please provide brief, yet cogent, answers to the prompt questions. This exam is worth 40% of your final grade, marked on a scale of 400 points possible. Generally speaking, your goal is to demonstrate that you have thoughtfully and logically considered the materials which we have studied, both in the readings and the classroom discussion. Your work is due IN HARD COPY in my office (West House 210) no later than 4:00pm Wednesday March 21st. No late exams will be accepted. Please turn in typed work only (you can cut-and-paste or tape-and-staple output and graphs). The results below were obtained with regression analysis using SPSS v24 on the WOU server. The dataset is for 159 nations, the source is the CIA World Factbook online. Thank you. I have enjoyed studying with you. PROMPT QUESTIONS NUMBER ONE [80 points]. Interpet the results of Model A. ● Is the Model a “good fit” for explaining GDP per capita? Explain. ● Which variables are doing a good job predicting GDP per capita? Explain. NUMBER TWO. [80 points]. Interpret the results of Model B. ● What happened when we dropped the variable “Unemployment”? ● In what sense is Model B a better specification than Model A? NUMBER THREE [80 points]. Interpret the results of Model C. ● What happened when we added the variable “Oil Revenue per Capita”? ● In what sense is Model C a better specification than Model B? ● Consider the variable “Public Debt,” it was not signficiant in Model A but it is highly significant in Model C. What should we conclude about the relationship between (y-variable) GDP per Capita and (x-variable) Public Debt? Explain. NUMBER FOUR [80 points]. Interpret the results of Model D. ● What happened when we transformed the variable Trade Deficit into Trade Deficit per Capita? ● In what sense is Model D a better specification than Model A? NUMBER FIVE [80 points]. Interpret the results of Model E. ● What is the biggest factor to take into account when comparing the results of Model E with the results of Model A? ● In what sense is Model E a better specification than Model A? DEFINITIONS OF VARIABLES GDP perCAP16 = gdp per capita in 2016 (in thousands of dollars) Population = total population in 2016 Freedom = Freedom Index for 2016 (scale: 0 = unfree to 100 = free) [source: Heritage Foundation] BudgetDeficit = government Revenue minus Expenditures as percentage of gdp in 2016 ForeignInvest = total Direct Foreign Investment in 2016 Saving = national Savings rate (as percentage) in 2016 Unemployment = Unemployment rate (as percentage) in 2016 Inflation = Inflation rate (as percentage) in 2016 Public Debt = total government debt as percentage of gdp in 2016 TradeDeficit = national Exports minus Imports (billions of dollars) in 2016 TradeDeficitPCT = Trade Deficit as percentage of gdp in 2016 Oil per CAP = total Oil Export revenue per capita GDPgrowthrate = long-run (2005-2015) real GDP growth rate (%) MODEL A Model Summary Method: Ordinary Least Squares Linear Regression Dependent Variable: GDP perCAP16 --------------------------------------------------------------------------------------------------------------------Adjusted-R-Squared = 0.562 df F-stat Sig. Regression 9 15.27 0.000 Residual 91 Total 100 --------------------------------------------------------------------------------------------------------------------unstandardized standardized Coefficients Coefficients variables B Error Beta t-stats Sig. -------------------------------------------------------------------------------------------------------------------(constant) -106 19.3 -5.54 0.000 Population -0.020 0.011 -0.15 -1.80 0.075 Freedom 1.50 0.259 0.59 5.79 0.000 BudgetDeficit -2.79 0.589 -0.35 -4.73 0.000 ForeignInvest 0.009 0.004 0.201 2.31 0.023 Saving 0.854 0.231 0.292 3.70 0.000 Unemployment -0.047 0.151 -0.023 -0.31 0.758 Inflation 0.370 0.327 0.087 1.13 0.262 Public Debt 0.100 0.052 0.137 1.94 0.056 TradeDeficit 0.011 0.017 0.052 0.66 0.512 --------------------------------------------------------------------------------------------------------------------- MODEL B ​- dropping Unemployment from Model A Model Summary Method: Ordinary Least Squares Linear Regression Dependent Variable: GDP perCAP16 --------------------------------------------------------------------------------------------------------------------Adjusted-R-Squared = 0.565 df F-stat Sig. Regression 8 17.54 0.000 Residual 94 Total 102 --------------------------------------------------------------------------------------------------------------------unstandardized standardized Coefficients Coefficients variables B Error Beta t-stats Sig. -------------------------------------------------------------------------------------------------------------------(constant) -109 16.6 -6.59 0.000 Population -0.021 0.011 -0.15 -1.85 0.068 Freedom 1.50 0.237 0.59 6.34 0.000 BudgetDeficit -2.76 0.581 -0.34 -4.76 0.000 ForeignInvest 0.010 0.004 0.206 2.39 0.019 Saving 0.894 0.222 0.312 4.03 0.000 Inflation 0.423 0.302 0.106 1.40 0.164 Public Debt 0.108 0.051 0.146 2.11 0.038 TradeDeficit 0.011 0.016 0.052 0.66 0.508 --------------------------------------------------------------------------------------------------------------------- MODEL C​ - added the variable “Oil revenue per Capita” to Model B Model Summary Method: Ordinary Least Squares Linear Regression Dependent Variable: GDP perCAP16 --------------------------------------------------------------------------------------------------------------------Adjusted-R-Squared = 0.860 df F-stat Sig. Regression 9 70.76 0.000 Residual 93 Total 102 --------------------------------------------------------------------------------------------------------------------unstandardized standardized Coefficients Coefficients variables B Error Beta t-stats Sig. -------------------------------------------------------------------------------------------------------------------(constant) -58 10.1 -5.77 0.000 Population -0.016 0.006 -0.12 -2.53 0.013 Freedom 0.91 0.140 0.36 6.47 0.000 BudgetDeficit 0.43 0.399 0.053 1.07 0.286 ForeignInvest 0.011 0.002 0.238 4.88 0.000 Saving 0.514 0.129 0.179 4.00 0.000 Inflation 0.128 0.172 0.032 0.75 0.458 Public Debt 0.155 0.029 0.211 5.32 0.000 TradeDeficit 0.011 0.009 0.050 1.13 0.262 Oil per Capita 0.130 0.009 0.661 14.13 0.000 --------------------------------------------------------------------------------------------------------------------- MODEL D​ - using Model A , the variable Trade Deficit was transformed into Trade Deficit as Percentage of GDP Model Summary Method: Ordinary Least Squares Linear Regression Dependent Variable: GDP perCAP16 --------------------------------------------------------------------------------------------------------------------Adjusted-R-Squared = 0.659 df F-stat Sig. Regression 9 22.46 0.000 Residual 91 Total 100 --------------------------------------------------------------------------------------------------------------------unstandardized standardized Coefficients Coefficients variables B Error Beta t-stats Sig. -------------------------------------------------------------------------------------------------------------------(constant) -85 17.5 -4.89 0.000 Population -0.015 0.009 -0.11 -1.63 0.107 Freedom 1.35 0.230 0.531 5.87 0.000 BudgetDeficit -2.53 0.521 -0.313 -4.84 0.000 ForeignInvest 0.007 0.003 0.139 1.93 0.056 Saving 0.440 0.215 0.151 2.05 0.043 Unemployment 0.143 0.138 0.072 1.03 0.304 Inflation 0.206 0.291 0.049 0.71 0.480 Public Debt 0.086 0.046 0.117 1.87 0.065 TradeDeficitPCT 1.601 0.312 0.381 5.13 0.000 --------------------------------------------------------------------------------------------------------------------- MODEL E​ - using Model A, added the variable GDP growth rate Model Summary Method: Ordinary Least Squares Linear Regression Dependent Variable: GDP perCAP16 --------------------------------------------------------------------------------------------------------------------Adjusted-R-Squared = 0.619 df F-stat Sig. Regression 10 10.92 0.000 Residual 51 Total 61 --------------------------------------------------------------------------------------------------------------------unstandardized standardized Coefficients Coefficients variables B Error Beta t-stats Sig. -------------------------------------------------------------------------------------------------------------------(constant) -167 30.8 -5.42 0.000 Population -0.025 0.013 -0.21 -1.92 0.060 Freedom 2.06 0.381 0.702 5.41 0.000 BudgetDeficit -3.77 0.740 -0.444 -5.09 0.000 ForeignInvest 0.008 0.005 0.174 1.66 0.104 Saving 1.12 0.344 0.331 3.25 0.002 Unemployment -0.201 0.304 -0.060 -0.66 0.512 Inflation 0.624 0.419 0.155 1.49 0.143 Public Debt 0.158 0.067 0.216 2.36 0.022 TradeDeficit 0.000 0.018 -0.002 -0.22 0.983 GDPgrowthrate 3.061 1.244 0.230 2.46 0.017 ---------------------------------------------------------------------------------------------------------------------
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Explanation & Answer

I wrote as much as possible for each question, so they are on the long side. We could answer more briefly, if needed.

Econometrics Questions
#1. a). The model is a good fit. The proportion of variation in GDP explained by the model is
fairly high (R^2=.562). The model is also significant, at p=.000, indicating that it is better than the
null model. However, it is possible to raise the R^2 even further.
b). Freedom, BudgetDeficit, ForeignInvest, and Savi...


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