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Tutorial 1 Econometrics

This document contains a tutorial on econometrics with 4 exercises. The tutorial covers topics like computing covariance, variance, correlation coefficients, hypothesis testing, and confidence intervals. It provides formulas and definitions for these statistical concepts. It also includes a table of the Student's t-distribution to help with hypothesis testing. The exercises ask students to apply these statistical techniques to sample data related to hotel costs, estimation methods, and greeting card values.

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Adam Ketata
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13 views

Tutorial 1 Econometrics

This document contains a tutorial on econometrics with 4 exercises. The tutorial covers topics like computing covariance, variance, correlation coefficients, hypothesis testing, and confidence intervals. It provides formulas and definitions for these statistical concepts. It also includes a table of the Student's t-distribution to help with hypothesis testing. The exercises ask students to apply these statistical techniques to sample data related to hotel costs, estimation methods, and greeting card values.

Uploaded by

Adam Ketata
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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University of Tunis 2022-2023

Tunis Business School Fall session

Econometrics

Tutorial 1

Exercise 1
1 n 1 n
1) Show that C ov( X , Y )  
n i 1
 X i  X Yi  Y  can also be written as   X iYi   XY .
n i 1

1 n 1 n
2) Show that Var  X     X i  X  can be also written as   X i   X 2 .
2 2

n i 1 n i 1

3) Compute Var  5 X  .

4) Compute Cov  X ,5Y 

5) If Y  A  B , show that
a. Cov  X , Y   Cov  X , A  Cov  X , B  .

b. Var Y   Var  A   Var  B   2Cov  A, B  .

6) If Y  aZ , where a is a constant, show that Cov  X , Y   aCov  X , Z  .

7) If Y  a , show that Cov  X , Y   0.

Cov  X , Y 
8) What happens to the linear correlation coefficient, rXY  if you multiply the
 XY
X data by 5?

Exercise 2
Given the following set of estimates taken from 10 random samples of a population using 2
alternative estimation methods.

1) Work out if the estimates are unbiased estimates of the true population value 6.
2) What can you say about (the sample) variance of the two estimators?
3) How might you decide whether to use from these two estimators?

1
Exercise 3

The average cost of a hotel room in New York is said to be $168 per night. To determine if
this is true, a random sample of 25 hotels was taken. The sample mean was $172.50 with a
sample standard deviation of $15.40.
1) What is the 95% confidence interval estimate of the population mean?
2) Test the appropriate hypotheses at 5% level.

Exercise 4

A stationery store wants to estimate the mean retail value of greeting cards that it has in its
inventory. A random sample of 30 greeting cards indicates a mean value of $2.55 and a
standard deviation of $0.44. Is there evidence that the population mean retail value of the
greeting cards is greater than $2.50? (Use a 0.05 level of significance).

2
Table of the Student's t-distribution

The table gives the values of t ;  where


Pr(T > t ;  ) =  , with  degrees of freedom

 0.1 0.05 0.025 0.01 0.005 0.001 0.0005



1 3.078 6.314 12.076 31.821 63.657 318.310 636.620
2 1.886 2.920 4.303 6.965 9.925 22.326 31.598
3 1.638 2.353 3.182 4.541 5.841 10.213 12.924
4 1.533 2.132 2.776 3.747 4.604 7.173 8.610
5 1.476 2.015 2.571 3.365 4.032 5.893 6.869

6 1.440 1.943 2.447 3.143 3.707 5.208 5.959


7 1.415 1.895 2.365 2.998 3.499 4.785 5.408
8 1.397 1.860 2.306 2.896 3.355 4.501 5.041
9 1.383 1.833 2.262 2.821 3.250 4.297 4.781
10 1.372 1.812 2.228 2.764 3.169 4.144 4.587

11 1.363 1.796 2.201 2.718 3.106 4.025 4.437


12 1.356 1.782 2.179 2.681 3.055 3.930 4.318
13 1.350 1.771 2.160 2.650 3.012 3.852 4.221
14 1.345 1.761 2.145 2.624 2.977 3.787 4.140
15 1.341 1.753 2.131 2.602 2.947 3.733 4.073

16 1.337 1.746 2.120 2.583 2.921 3.686 4.015


17 1.333 1.740 2.110 2.567 2.898 3.646 3.965
18 1.330 1.734 2.101 2.552 2.878 3.610 3.922
19 1.328 1.729 2.093 2.539 2.861 3.579 3.883
20 1.325 1.725 2.086 2.528 2.845 3.552 3.850

21 1.323 1.721 2.080 2.518 2.831 3.527 3.819


22 1.321 1.717 2.074 2.508 2.819 3.505 3.792
23 1.319 1.714 2.069 2.500 2.807 3.485 3.767
24 1.318 1.711 2.064 2.492 2.797 3.467 3.745
25 1.316 1.708 2.060 2.485 2.787 3.450 3.725

26 1.315 1.706 2.056 2.479 2.779 3.435 3.707


27 1.314 1.703 2.052 2.473 2.771 3.421 3.690
28 1.313 1.701 2.048 2.467 2.763 3.408 3.674
29 1.311 1.699 2.045 2.462 2.756 3.396 3.659
30 1.310 1.697 2.042 2.457 2.750 3.385 3.646

40 1.303 1.684 2.021 2.423 2.704 3.307 3.551


60 1.296 1.671 2.000 2.390 2.660 3.232 3.460
120 1.289 1.658 1.980 2.358 2.617 3.160 3.373
 1.282 1.645 1.960 2.326 2.576 3.090 3.291

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