UNIVERSITI TUNKU ABDUL RAHMAN (UTAR)

FACULTY OF BUSINESS AND FINANCE (FBF)

Unit Plan
1. Unit Code &
Unit Title:
UBEQ2013 BASIC ECONOMETRICS
2. Course o
Stud!:
B"#$elor o E#ono%i#s &'ons( )in"n#i"l E#ono%i#s
B"#$elor o Business Ad%inistr"tion &'ons(B"n*in+ "nd )in"n#e
B"#$elor o )in"n#e &'ons(
3. ,e"r o
Stud!:
,e"r T-o. Tri%ester One
/. ,e"r "nd
Tri%ester:
201/00
0. Credit 'our
3 #redit $ours
1. 2e#turin+ &
Tutorin+
$ours
2 $ours le#ture 3er -ee* or t$e dur"tion o 1/ -ee*s
1.0 $ours tutori"l 3er -ee* or t$e dur"tion o 1/ -ee*s
4. 2e#turer: Ms. T"n Ai 2i"n. ME#on. BE#on &'ons(. t"n"l5ut"r.edu.%!
6. Tutor: Ms. T"n Ai 2i"n. t"n"l5ut"r.edu.%!
Ms. T"n+ Siu En+. t"n+se5ut"r.edu.%!
Ms. 2"u Sie- ,ee. s!l"u5ut"r.edu.%!
7. Moder"tor Ms. 2"u Sie- ,ee. s!l"u5ut"r.edu.%!
10. Mode o
8eli9er!:
2e#ture "nd Tutori"l
11. O:;e#ti9e: T$e unit "i%s to 3ro9ide so%e und"%ent"l #on#e3ts "nd deinitions to
si%3le "nd %ulti3le line"r re+ression %et$ods. in#ludin+ t$eir use in
esti%"tin+ "nd testin+ t$e 9"lidit! o %odels in e#ono%i#s. in"n#e "nd
:usiness.
12. 2e"rnin+
Out#o%e:
Ater #o%3letin+ t$e su:;e#t. students "re ":le to:
1. E<3l"in t$e und"%ent"l #on#e3ts.
2. 8eine t$e si%3le line"r re+ression %et$ods.
3. E<3l"in t$e #l"ssi#"l nor%"l line"r re+ression %odel.
/. 8eine t$e %ulti3le line"r re+ression %et$ods.
0. 8e%onstr"te t$e du%%! 9"ri":le re+ression %odel.
1. A33l! t$e %et$ods in esti%"tin+ "nd testin+ t$e 9"lidit! o %odels in
t$e ield o e#ono%i#s. in"n#e "nd :usiness.
Unit Plan of UBEQ2013 Basic Econometrics
1
13. Re"din+ 2ist: Main Text:
1. =u;"r"ti. 8.N.. & >orter. 8.C. &2007(. B"si# E#ono%etri#s. 0
t$
ed. USA:
M#=r"-?'ill.
Aiti!nal Text:
1. 'ill. R. C.. =riit$s. @. E. & Aud+e. =.=. &2004(. Undergraduate
econometrics. &3
rd
ed.(. Ne- ,or*: Ao$n @ile!.
2. Sto#*. A. '. & @"tson. M. @. &2001(. Introduction to econometrics. &2
nd
ed.(. Boston. MA: Addison @esle!.
3. @ooldrid+e. A. M. &2007(. Introductory econometrics: A modern
approach. &/
t$
ed.(. M"son. O$io: T$o%sonBSout$?@estern.
/. Asteriou. 8. &2004(. Applied econometrics: A modern approach using
EViews and Microfit. B"sin+sto*e: >"l+r"9e M"#Mill"n.
0. =riit$s. @. E.. 'ill. R. C.. 2i%. =. C. &2006(. Using EViews for
principles of econometrics &3rd ed.(. 'o:o*en. NA: Ao$n @ile! & Sons.
1/. Met$od o
Assess%ent: N!" Met#! !$ A%%e%%&ent T!tal
1. Course-or*
"( Ter% >ro;e#t 20C &00 %"r*s(
:( Mid?ter% Test 20C &00 %"r*s(
T!tal '() *(( &a+,%
/0C
2. )in"l E<"%in"tion 10C
-RAND TOTAL *(()
*" C!.+%e/!+, ('())
a) Te+& P+!0e1t 2() (3( &a+,%)
? A ter% 3ro;e#t is reDuired in t$is unit. -$i#$ -ill introdu#e students
to "33lied rese"r#$ "nd t$e use o e#ono%etri#s.
? T$e d"t" "re re"dil! "9"il":le "nd -ill :e +i9en :! t$e le#turerBtutor.
T$e 3ro;e#t -ill :e done in te"%s o FIVE students. T$e entire
3ro;e#t is due on '
t#
A.4.%t 2(*' &Mond"!( :! 0.30 >.M. 0 %"r*s
-ill :e dedu#ted or e9er! $our or 3"rt o "n $our. "ter t$"t ti%e.
C!&5.te+ La6 %e%%i!n%: T$e st"tisti#"l sot-"re 3"#*"+e EEie-s -ill :e
used or esti%"tion "nd testin+. 2":s -ill #onsist o instru#tion "nd e<"%3les
$el3ul in #o%3letin+ t$e ter% 3ro;e#t. "nd ot$er "#ti9ities.
6) Mi7te+& Te%t 2() (3( &a+,%)
? T$e dur"tion o t$e test -ill :e 1 $ours "nd -ill :e s#$eduled "t
8EEK 9 (2:
t#
;.l< 2(*'). T$e test #onsists o T8O (2) stru#tur"l
ess"! Duestions. -$i#$ #o9ers to3i#s 2 to 6.
2" Final Exa&inati!n (:())
T$e in"l e<"%in"tion or t$is su:;e#t -ill :e 2.0 $ours "nd -ill #onsist o
T8O se#tions:
Se#tion A &/0 %"r*s( F One #o%3ulsor! Duestion.
Se#tion B &10 %"r*s( F 3 Duestions in -$i#$ students "re reDuired to
Unit Plan of UBEQ2013 Basic Econometrics
2
"ns-er "n! 2 Duestions

10. Re%"r*: ACADEMIC RE-ULATIONS
Pla4ia+i%&
>l"+i"ris% is deined "s t$e su:%ission or 3resent"tion o -or*. in "n! or%.
-$i#$ is not oneGs o-n. -it$out "#*no-led+%ent o t$e sour#es. I " student
o:t"ins inor%"tion or ide"s ro% "n outside sour#e. t$"t sour#e %ust :e
"#*no-led+ed. Anot$er rule to ollo- is t$"t "n! dire#t Duot"tion %ust :e
3l"#ed in Duot"tion %"r*s "nd t$e sour#e i%%edi"tel! #ited.
>l"+i"ris% is "lso deined "s #o3! o "ll or 3"rt o t$e -or* o "not$er
student&s( o #urrent or 3re9ious :"t#$ o t$is Uni9ersit! or "not$er $i+$er
le"rnin+ institution.
T$e Uni9ersit!Gs de+ree "nd ot$er "#"de%i# "-"rds "re +i9en in re#o+nition
o t$e #"ndid"teGs 3erson"l "#$ie9e%ent. >l"+i"ris% is t$ereore #onsidered
"s "n "#t o "#"de%i# r"udulen#e "nd "s "n oen#e "+"inst Uni9ersit!
dis#i3line.
Intelle1t.al P+!5e+t<
Co3!ri+$t %ust :e seriousl! 3rote#ted. T$e Uni9ersit! t"*es " stron+ st"nd
"+"inst "n! ille+"l 3$oto#o3!in+ o te<t:oo*s "nd "n! ot$er %"teri"ls :!
students. Students "re ore-"rned o t$e #onseDuen#es "nd t$e 3en"lt! t$"t
%"! :e %eted out i t$e! "re H#"u+$t in t$e "#tH.

M!e !$ Re$e+en1in4
Students "re "d9ised to in#or3or"te 3ro3er "#"de%i# %odes o reeren#in+.
T$e nor%"ll! "##e3t":le %ode o "#"de%i# reeren#in+ is t$e A%eri#"n
>s!#$olo+i#"l Asso#i"tion &A>A( s!ste%.
Unit Plan of UBEQ2013 Basic Econometrics
3
Tea1#in4 Plan
Le1t.+e= T.t!+ial > A%%i4n&ent Plan
8ee, Le1t.+e T!5i1 T.t!+ial ?
A%%i4n&ent
Re$e+en1e
1
&21B00
I
01B01(
T!5i1 * : Int+!.1ti!n
@$"t is E#ono%etri#sJ
Met$odolo+! o E#ono%etri#s
T!3es o E#ono%etri#s
M"t$e%"ti#"l "nd St"tisti#"l >rereDuisites
Tutori"l 1:
>r"#ti#"l 2": 1: =et
to *no- !our d"t"
=u;"r"ti &
>orter
&2007(
&Introdu#tio
n: 3"+e 1?
12(
2
&02B01
I
06B01(
T!5i1 2 : Sin4le7E@.ati!n Re4+e%%i!n M!el%
T$e Modern Inter3ret"tion o Re+ression
Re+ression 9ersus C"us"tion
Re+ression 9ersus Correl"tion
T$e N"ture "nd Sour#es o 8"t" or E#ono%i#
An"l!sis
Tutori"l 2 &To3i#
1(:
/ s$ort Duestions
or dis#ussion.
=u;"r"ti &
>orter
&2007(
&C$"3ter 1:
3"+e 10?31(
3
&07B01
I
10B01(
T!5i1 A : T/!7Va+ia6le Re4+e%%i!n Anal<%i%:
S!&e Ba%i1 Iea%
T$e Con#e3t o >o3ul"tion Re+ression )un#tion
T$e Me"nin+ o t$e Ter% 2ine"r
T$e Si+nii#"n#e o t$e Sto#$"sti# 8istur:"n#e
Ter%
Tutori"l 3 &To3i#
2(:
3 s$ort Duestions
or dis#ussion "nd 1
Duestion or
3r"#ti#"l l":
e<er#ise
&#orrel"tion
"n"l!sis(.
=u;"r"ti &
>orter
&2007(
&C$"3ter 2:
3"+e 3/?/6(
/
&11B01
I
22B01(
T!5i1 ' : T/!7Va+ia6le Re4+e%%i!n Anal<%i%: T#e
P+!6le& O$ E%ti&ati!n
T$e Met$od o Ordin"r! 2e"st SDu"res &O2S(
T$e Cl"ssi#"l 2ine"r Re+ression Model
Assu%3tions
>ro3erties o 2e"st?SDu"res Esti%"tors: T$e
="uss?M"r*o9 T$eore%
T$e Coei#ient o 8eter%in"tion
Tutori"l / &To3i#
3(:
3 s$ort Duestions
or dis#ussion "nd 1
Duestion or
3r"#ti#"l l":
e<er#ise &si%3le
line"r re+ression(.
=u;"r"ti &
>orter
&2007(
&C$"3ter 3:
3"+e 00?60(
0
&23B01
I
27B01(
T!5i1 3 : Cla%%i1al N!+&al Linea+ Re4+e%%i!n
M!el (CNLRM)
T$e >ro:":ilit! 8istri:ution o 8istur:"n#es
T$e Nor%"lit! Assu%3tion or 8istur:"n#es
>ro3erties o O2S Esti%"tor Under t$e Nor%"lit!
Assu%3tion
T$e Met$od o M"<i%u% 2i*eli$ood
Tutori"l 0 &To3i#
/(:
0 s$ort Duestions
or dis#ussion.
=u;"r"ti &
>orter
&2007(
&C$"3ter /:
3"+e 74?
102(
Unit Plan of UBEQ2013 Basic Econometrics
4
Le1t.+e= T.t!+ial > A%%i4n&ent Plan
8ee, Le1t.+e T!5i1 T.t!+ial ?
A%%i4n&ent
Re$e+en1e
1
&30B01
?
01B04(
T!5i1 :: T/!7Va+ia6le Re4+e%%i!n: Inte+Bal
E%ti&ati!n > H<5!t#e%i% Te%tin4
Inter9"l Esti%"tion: So%e B"si# Ide"s
Coniden#e Inter9"ls or Re+ression Coei#ients
Coniden#e Inter9"ls or E"ri"n#es
'!3ot$esis Testin+: T$e Coniden#e?Inter9"l
A33ro"#$
'!3ot$esis Testin+: T$e Test?o?Si+nii#"n#e
A33ro"#$
Re+ression An"l!sis "nd An"l!sis o E"ri"n#e

Tutori"l 1 &To3i#
0(:
0 s$ort Duestions
or dis#ussion "nd 1
Duestion or
3r"#ti#"l l":
e<er#ise &A"rDue
Ber" nor%"lit! test(
=u;"r"ti &
>orter
&2007(
&C$"3ter 0
& 1: 3"+e
104?140(
4
&04B04
I
13B04(
T!5i1 C : M.lti5le Re4+e%%i!n Anal<%i%: T#e
P+!6le& O$ E%ti&ati!n
T$e T$ree?E"ri":le Model: Not"tion "nd
Assu%3tions
Inter3ret"tion o Multi3le Re+ression EDu"tion
T$e Me"nin+ o >"rti"l Re+ression Coei#ients
O2S "nd M"<i%u% 2i*eli$ood &M2( Esti%"tion
o t$e >"rti"l Re+ression Coei#ients
T$e Multi3le Coei#ient o 8eter%in"tion R
2
"nd
t$e Multi3le Coei#ient o Correl"tion R
T$e Rel"tions$i3 :et-een R
2
"nd Ad;usted R
2

Re+ression Models: Co::?8ou+l"s >rodu#tion
)un#tion "nd >ol!no%i"l Re+ression Model
Tutori"l 4 &To3i#
1(:
3 s$ort Duestions
or dis#ussion "nd 1
Duestion or
3r"#ti#"l l":
e<er#ise &#$oosin+
:et-een line"r &
2o+?line"r
re+ression(
=u;"r"ti &
>orter
&2007(
&C$"3ter 4:
3"+e 166?
210(
6
&1/B04
I
20B04(
T!5i1 D : M.lti5le Re4+e%%i!n Anal<%i%: T#e
P+!6le& O$ In$e+en1e
'!3ot$esis Testin+ in Multi3le Re+ression
'!3ot$esis Testin+ ":out Indi9idu"l Re+ression
Coei#ients
Testin+ t$e O9er"ll Si+nii#"n#e o t$e S"%3le
Re+ression
Testin+ t$e EDu"lit! o T-o Re+ression
Coei#ients
Testin+ or Stru#tur"l or >"r"%eter St":ilit! o
Re+ression Models: C$o- Test
>redi#tion -it$ Multi3le Re+ression
T$e Troi*" o '!3ot$esis Tests: T$e 2i*eli$ood
R"tio &2R(. @"ld "nd 2"+r"n+e Multi3lier &2M(
Tests
Testin+ t$e )un#tion"l )or% o Re+ression:
C$oosin+ :et-een 2ine"r "nd 2o+?2ine"r
Tutori"l 6 &To3i#
4(:
2 s$ort Duestions
or dis#ussion "nd 1
Duestion or
3r"#ti#"l l":
e<er#ise &Multi3le
re+ression "n"l!sis(
=u;"r"ti &
>orter
&2007(
&C$"3ter 6:
3"+e 233?
212(
Unit Plan of UBEQ2013 Basic Econometrics
5
Le1t.+e= T.t!+ial > A%%i4n&ent Plan
8ee, Le1t.+e T!5i1 T.t!+ial ?
A%%i4n&ent
Re$e+en1e
Re+ression Models
7
&21B04
I
24B04(
T!5i1 9 : D.&&< Va+ia6le Re4+e%%i!n M!el%
T$e N"ture o 8u%%! E"ri":le
ANOEA Model: C"us"tion in t$e Use o 8u%%!
E"ri":le
ANOEA -it$ T-o Qu"lit"ti9e E"ri":les
Re+ression -it$ " Mi<ture o Qu"ntit"ti9e "nd
Qu"lit"ti9e Re+ressors: T$e ANCOEA Models
T$e 8u%%! E"ri":le Altern"ti9e to t$e C$o-
test
Inter"#tion Ee#ts Usin+ 8u%%! E"ri":les in
Se"son"l An"l!sis
Tutori"l 7 &To3i#
6(:
3 s$ort Duestions
or dis#ussion.
Mi7te+& Te%t
(2C?C?2(*A)
T!5i1 2 t! D
A %t+.1t.+al e%%a<
@.e%ti!n% (*"3
#!.+%)
=u;"r"ti &
>orter
&2007(
&C$"3ter 7:
3"+e 274?
323(
10
&26B04
I
03B06(
T!5i1 *( : M.lti1!llinea+it<
T$e N"ture o Multi#olline"rit!
Esti%"tion in t$e >resen#e o >ere#t Colline"rit!
Esti%"tion in t$e >resen#e o K'i+$L :ut
KI%3ere#tL Multi#olline"rit!
T$eoreti#"l ConseDuen#es o Multi#olline"rit!
Tutori"l 10 &To3i#
7(:
3 s$ort Duestions
or dis#ussion.
=u;"r"ti &
>orter
&2007(
&C$"3ter 10:
3"+e 320?
300(
11
&0/B06
I
10B06(
T!5i1 **: Hete+!%1ea%ti1it<
T$e N"ture o 'eteros#ed"sti#it!
O2S Esti%"tion in t$e >resen#e o
'eteros#ed"sti#it!
T$e Met$od o =ener"lised 2e"st SDu"res &=2S(
ConseDuen#es o Usin+ O2S in t$e >resen#e o
'eteros#ed"sti#it!
Tutori"l 11 &To3i#
10(:
3 s$ort Duestions
or dis#ussion.
S.6&i%%i!n !$
te+& 5+!0e1t !n
23?(A?*2 (M!na<)
6< 3"A( P"M"
=u;"r"ti &
>orter
&2007(
&C$"3ter 11:
3"+e 310?
/00(
12
&11B06
I
14B06(
T!5i1 *2: A.t!1!++elati!n
T$e N"ture o Auto#orrel"tion
O2S Esti%"tion in t$e >resen#e o
Auto#orrel"tion
T$e B2UE Esti%"tor in t$e >resen#e o
Auto#orrel"tion
ConseDuen#es o Usin+ O2S in t$e >resen#e o
Auto#orrel"tion
8ete#tin+ Auto#orrel"tion
Re%edi"l Me"sures
Tutori"l 12 &To3i#
11(:
3 s$ort Duestions
or dis#ussion.
=u;"r"ti &
>orter
&2007(
&C$"3ter 12:
3"+e /12?
/02(
Unit Plan of UBEQ2013 Basic Econometrics
6
Le1t.+e= T.t!+ial > A%%i4n&ent Plan
8ee, Le1t.+e T!5i1 T.t!+ial ?
A%%i4n&ent
Re$e+en1e
13
&16B06
I
2/B06(
T!5i1 *A : E1!n!&et+i1 M!ellin4: M!el
S5e1i$i1ati!n > Dia4n!%ti1 Te%tin4
Model Sele#tion Criteri"
T!3es o S3e#ii#"tion Errors
ConseDuen#es o Model S3e#ii#"tion Errors
Tutori"l 13 &To3i#
12(:
3 s$ort Duestions
or dis#ussion.
=u;"r"ti &
>orter
&2007(
&C$"3ter 13:
3"+e /16?
012(
1/
&20B06
I
31B06(
ReBi%i!n Tutori"l 1/ &To3i#
13(:
2 s$ort Duestions
or dis#ussion
P+a1ti1al La6 S1#e.le
>r"#ti#"l
2":
To3i# O:;e#ti9es 8es#ri3tion
Tutori"l
1
&21B00
I01B01(
=et to *no-
!our d"t"
To introdu#e t$e use o EEie-s
sot-"re in d"t" "n"l!sin+.
A nu%:er o +ener"l :"si#
3ro#edures ro% EEie-s is
introdu#ed "s " st"rt to le"nin+ t$e
3rin#i3les o t$is sot-"re
3"#*"+e.
Tutori"l
3
&07B01
I
10B01(
Correl"tion
"n"l!sis
To %e"sure t$e stren+t$ o line"r
"sso#i"tion :et-een t-o 9"ri":les.
8e%onstr"te " +ener"l :"si#
3ro#edure to 3lot s#"tter +r"3$ "nd
undert"*e " si%3le #orrel"tion
"n"l!sis.
Tutori"l
/
&11B01
I
22B01(
Si%3le line"r
re+ression
To introdu#e t$e si%3le line"r
re+ression.
S$o- t$e 3ro#edures o e<$i:itin+
" si%3le line"r re+ression line in "
s#"tter 3lot.
Tutori"l
1
&30B01?
01B04(
Si%3le line"r
re+ression
To de9elo3 "nd illustr"te t$e
A"rDue Ber" test
8eter%ine -$et$er t$e
distur:"n#es in t$e re+ression "re
nor%"ll! distri:uted usin+ A"rDue
Ber" test
Tutori"l
4
&04B04I
13B04(
Si%3le line"r
re+ression
To introdu#e t$e dierent
un#tion"l or%s o re+ression
%odel: t$e line"r "nd lo+?line"r
Esti%"tes dierent un#tion"l
or%s o si%3le re+ression usin+
E9ie-s
Tutori"l
6
Multi3le
re+ression
To e<"%ine line"r rel"tions$i3 in
%ulti3le re+ression "n"l!sis.
Esti%"tes " %ulti3le re+ression
ste% ro% t$e t$eor! o %one!
Unit Plan of UBEQ2013 Basic Econometrics
7
&1/B04I
20B04(
"n"l!sis de%"nd.
T$is Unit >l"n is:
>re3"red :!:
MMMMMMMMMMMM
&N"%e: Ms. T"n Ai 2i"n(
2e"d 2e#turer
Moder"ted :!:
MMMMMMMMMMMM
MM..
&N"%e: Ms. 2"u Sie- ,ee(
Moder"tor
A33ro9ed :!:
MMMMMMMMMMMM
MM.
&N"%e: 8r. @on+ C$in ,oon+(
'e"d. 8e3"rt%ent o
E#ono%i#s
8"te: 8"te: 8"te:
Notes: The information provided in this Unit lan is su!"ect to change !y the #ecturers. $tudents shall
!e notified in advance of any changes.
Unit Plan of UBEQ2013 Basic Econometrics
8