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# econ3208

ECON 3208/3291

Econometric Methods

Tutorial 1

(tutorials to get held in week 2)

The goal of the following is actually to review some of the essential materials covered in the Intro training course.

In an attempt to better understand the determinants of smoking cigarettes demand, consider the following specification of a require function pertaining to daily cigarette consumption: CIGSi = ОІ1 + ОІ2 LINCOMEi + ОІ3 LPRICEi + ОІ4 EDUCi & ОІ5 AGEi + ОІ6 AGESQi + ui in which i means individuals. The[desktop] is approximated using a test of 806 individuals. Info definitions and associated synopsis statistics receive in Table 2 . one particular while the OLS regression answers are given in Table 2 . 2 .

Please solution the following questions using the data in the dining tables. (i) Using the estimated benefits:

(a) Thoroughly interpret each of the parameters in the regression unit including their magnitudes and expected and actual signs.

(b) Comment on the record significance of each and every of the approximated coefficients cigarette demand.

(d) Suppose the regression style was re-estimated under the hypothesis that ОІ2 = ОІ3 = 0 to yield a recurring sums of squares of 144, 240. If the unique model a new residual sums of squares of a hundred and forty four, 000 test out the hypothesis that ОІ2 = ОІ3 = zero. Does the response to this check affect the conclusion in (c)?

(e) On the basis of the results touch upon the position of age as being a determinant of cigarette require.

(f) Realize that there are simply no variables associated with government coverage interventions including prohibition of tobacco advertising and marketing or addition of health warnings upon cigarette packets. Provide 1 justification how come this omission could have been a reasonable assumption for these data.

(ii) Suppose this diagnostics were associated with the[desktop] R2 = 0. 20, RESET sama dengan 2 . goal, B-P = 25. 63

where the TOTALLY RESET test uses both squared and cubed predictions since additional factors and BP is the LM version Breusch-Pagan test (see Wooldridge p. 269 or p. 277 in 3rd ed. ) for the null speculation that...

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