Scribd
Upload
12 views1 page

Econometrics For Finanace Test 2

The document presents a regression analysis on consumption expenditure using various educational levels, gender, and age of household heads as explanatory variables. It includes statistical results such as R-squared, coefficients, and significance tests, along with tests for omitted variables and heteroskedasticity. The analysis aims to determine the impact of education and other factors on consumption expenditure, while also assessing potential biases and variances in the model.

Uploaded by

Eyerusalem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
12 views1 page

Econometrics For Finanace Test 2

The document presents a regression analysis on consumption expenditure using various educational levels, gender, and age of household heads as explanatory variables. It includes statistical results such as R-squared, coefficients, and significance tests, along with tests for omitted variables and heteroskedasticity. The analysis aims to determine the impact of education and other factors on consumption expenditure, while also assessing potential biases and variances in the model.

Uploaded by

Eyerusalem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Addis Ababa University

College of business and economics


Department of economic
Econometrics for finance
Test (2): maximum points (10 points)
Name: ___________________________Id. No: _____________ Section: ____________
Given the following regression results, answer the next questions.
. reg lncon i.educ sex_hh age_hh

Source SS df MS Number of obs = 6,767


F(6, 6760) = 162.94
Model 457.933165 6 76.3221942 Prob > F = 0.0000
Residual 3166.4861 6,760 .468415103 R-squared = 0.1263
Adj R-squared = 0.1256
Total 3624.41926 6,766 .535681239 Root MSE = .68441

lncon Coefficient Std. err. t P>|t| [95% conf. interval]

educ
Primary_School .2447878 .0213594 11.46 0.000 .2029166 .286659
Secondary_School .4696264 .0277752 16.91 0.000 .4151783 .5240745
College_educ .5639771 .0343628 16.41 0.000 .4966152 .6313391
Tertiary_educ .7479756 .033579 22.28 0.000 .6821502 .813801

sex_hh -.1924603 .0182436 -10.55 0.000 -.2282235 -.1566971


age_hh .0042669 .0005999 7.11 0.000 .0030909 .0054429
_cons 10.41362 .0329663 315.89 0.000 10.34899 10.47824

Where: lncon is log of consumption expenditure, variables under education refers primary
school complete, secondary school complete, college education, and first degree and above
complete. Sex_hh is gender of household head and age_hh is age of the household head.
A. What is the total number of sample size?
B. What is the 𝑅 2 ? Interoperate it?
C. What is RSS, ESS and TSS?
D. Using the S.E test, which of the explanatory variables are significant and which of them
are not? Show the necessary steps?
E. Using the p-value test approach, identify statistically significant covariates.
F. Interpret the coefficient of educational variables.
2. The result for omitted variable test is given as follow:
Ramsey RESET test for omitted variables
Omitted: Powers of fitted values of lncon

H0: Model has no omitted variables

F(3, 6757) = 11.81


Prob > F = 0.0000

A. Does the module face omitted variables bias problems? Why?


3. The heteroskedasticity test result is given bellow:
Breusch–Pagan/Cook–Weisberg test for heteroskedasticity
Assumption: Normal error terms
Variable: Fitted values of lncon

H0: Constant variance

chi2(1) = 63.85
Prob > chi2 = 0.0000

A. Does the module face heteroskedasticity problems? Why?

You might also like