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Addis Ababa University - Group Assignment I-4

This document contains an introduction and outline for a group assignment on econometrics. Chapter I introduces econometrics and discusses the differences between economic theory, models, and econometrics models. It also lists the necessary steps in econometrics methodology and desirable properties of models. Chapter II focuses on simple linear regression, discussing the differences between regression and correlation, assumptions of regression models, and the regression equation. It includes instructions to estimate and test the significance of variables in a regression model using GDP and money supply data.

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Dawit Tilahun
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254 views1 page

Addis Ababa University - Group Assignment I-4

This document contains an introduction and outline for a group assignment on econometrics. Chapter I introduces econometrics and discusses the differences between economic theory, models, and econometrics models. It also lists the necessary steps in econometrics methodology and desirable properties of models. Chapter II focuses on simple linear regression, discussing the differences between regression and correlation, assumptions of regression models, and the regression equation. It includes instructions to estimate and test the significance of variables in a regression model using GDP and money supply data.

Uploaded by

Dawit Tilahun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Addis Ababa University

College of Business and Economics


Department of Accounting and Finance
Group Assignment I for the course Econometrics for Finance
Name of Instructor: Minda Tesga (MSc.)
March 29, 2023
Chapter I: Introduction
1. What is Econometrics?
2. List and discuss the basic differences between economic theory, economic/financial model, and
econometrics model.
3. List and discuss the necessary steps in econometrics methodology
4. List and discuss the basic desirable properties of the econometrics model.
5. List and discuss the type of data based on sources, nature or characteristics, and scope.
Chapter II: Simple Linear Regression Model
6. What is registration? What is correlation? List and discuss the main difference between
regression and correlation
7. List and discuss the basic assumptions of the classical linear regression model
8. What are the basic properties of the Classical Linear Regression Model?
9. The model is given as 𝒀𝒊 =∝ + 𝜷𝑿 + 𝜺 ; then drive the regression equation for the
parameters.
10. The model is given as 𝒀𝒊 = 𝜷𝑿 + 𝜺 ; then drive the regression equation for the parameters.
11. Based on the below-given information,

12. Report the estimation or regressing result? Then, test the significance of X statistically, at a 95%
confidence interval using; a) Standard error test, b) Student t-test, and c) confidence interval test.
13. Based on the STATA result below; GDP is a function of Money Supply LnGDP=∝ +𝜷𝑴𝑺 + 𝜺
. reg LnGDP LnMS

Source SS df MS Number of obs = 42


F(1, 40) = 4142.91
Model 147.849449 1 147.849449 Prob > F = 0.0000
Residual 1.42749533 40 .035687383 R-squared = 0.9904
Adj R-squared = 0.9902
Total 149.276944 41 3.64090108 Root MSE = .18891

LnGDP Coef. Std. Err. t P>|t| [95% Conf. Interval]

LnMS 1.126455 .0175009 64.37 0.000 1.091085 1.161826


_cons .5339922 .1768393 3.02 0.004 .1765867 .8913978

Report the estimation or regressing result? Then, interpret the result, including R2, and test the
significance of MS statistically, at a 95% confidence interval using; a) Standard error test, b) Student
t-test, c) confidence interval test, and d) P-value test.
Addis Ababa, ETHIOPIA

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