UNIVERSITY OF GUJRAT

Semester Spring 2020 – Final Term Examination (Online)

Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Question No 1
Fit the “pooled” model using health outcome (COMP) as a dependent variable and
education (EDUC), health expenditure (HLTHEXP) as independent variables.
. regress comp educ hlthexp

Source SS df MS Number of obs = 700

F( 2, 697) = 701.19
Model 71541.1976 2 35770.5988 Prob > F = 0.0000
Residual 35556.853 697 51.0141362 R-squared = 0.6680
Adj R-squared = 0.6670
Total 107098.051 699 153.216095 Root MSE = 7.1424

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

educ 2.449954 .1221197 20.06 0.000 2.210187 2.68972

hlthexp .0071716 .0005224 13.73 0.000 .0061459 .0081973
_cons 55.9177 .6838157 81.77 0.000 54.57512 57.26029

Question No 2
Report your results.
No you see that the f value is 701.19 and it is significant and the R-square value is 0.6680 and it
is fit model. On the other table you see that if education level increase the health outcome
increase and it is according to theory the value is 2.449954 and it is significant. On the other
hand if health expenditure increase the health outcome decease and it is against the theory
-0071716 but it is significant.

Question No 3
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Using the Panel data analysis approach, determine which model, fixed or random effects is
preferred.
Fixed Effect:
. xtreg comp educ hlthexp, fe

Fixed-effects (within) regression Number of obs = 700

Group variable: id Number of groups = 140

R-sq: within = 0.0193 Obs per group: min = 5

between = 0.6927 avg = 5.0
overall = 0.6518 max = 5

F(2,558) = 5.50
corr(u_i, Xb) = 0.1452 Prob > F = 0.0043

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

educ 2.693282 1.157575 2.33 0.020 .4195439 4.96702

hlthexp .0037855 .0026195 1.45 0.149 -.0013598 .0089308
_cons 56.06792 6.723484 8.34 0.000 42.86149 69.27435

sigma_u 6.7413141
sigma_e 3.3804231
rho .79907258 (fraction of variance due to u_i)

F test that all u_i=0: F(139, 558) = 18.37 Prob > F = 0.0000

In this total observation is 700 and the value is 0.0042.

Random effect:
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

. xtreg comp educ hlthexp, re

Random-effects GLS regression Number of obs = 700

Group variable: id Number of groups = 140

R-sq: within = 0.0184 Obs per group: min = 5

between = 0.7098 avg = 5.0
overall = 0.6677 max = 5

Wald chi2(2) = 345.35

corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000

comp Coef. Std. Err. z P>|z| [95% Conf. Interval]

educ 2.505574 .2409721 10.40 0.000 2.033277 2.977871

hlthexp .00671 .0009916 6.77 0.000 .0047664 .0086536
_cons 55.80166 1.372749 40.65 0.000 53.11112 58.4922

sigma_u 6.3470199
sigma_e 3.3804231
rho .77902078 (fraction of variance due to u_i)

You see that wald test 345.35 and it is significant and the value is 0.0000.

Hausman Test:
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

. hausman fixed .

Coefficients
(b) (B) (b-B) sqrt(diag(V_b-V_B))
fixed random Difference S.E.

educ 2.693282 2.505574 .1877079 1.132216

hlthexp .0037855 .00671 -.0029245 .0024246

b = consistent under Ho and Ha; obtained from xtreg

B = inconsistent under Ha, efficient under Ho; obtained from xtreg

Test: Ho: difference in coefficients not systematic

chi2(2) = (b-B)'[(V_b-V_B)^(-1)](b-B)
= 1.51
Prob>chi2 = 0.4700

Now you see that p value is 0.47 and it is greater than .05 and it is significant due to which we
accept fixed test due to random effect result is good.

Question No 4
. xtcsd, pesaran abs

Pesaran's test of cross sectional independence = 2.087, Pr = 0.0369

Average absolute value of the off-diagonal elements = 0.317

Now you see that it is non-significant P value is greater then .05 because there is no serial
correlation and it is desirable.
Question No 5
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Briefly Explain the concept of Mediation and Moderation graphically.

Mediation:
Mediator

Independent Dependent

The mediator variable is one explain the relationship between two other variables. Sometime
direct relation are significant or sometimes non-significant. Mediator variable is the
"Middleman" between an independent variable and dependent variable.
We can define as A mediator variable that explains the how or why of an (observed) relationship
between an independent variable and its dependent variable.
Moderator
 Categorical
 Continuous

Independent

Moderator Dependent

Interaction

Moderator variable is one that influence the strengthen or weakness of a relationship between
two other variables. Moderator variable influence the strength or direction of relation between a
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

IV and DV. Objective of the moderator variable is to measure the strength of relationship
between IV and DV.

Question No 6
How can we remove autocorrelation in a time series data?

To remove auto correlation in a time series data, we will adopt following steps:
We will develop a regression model and we will remove the serial correlation (Autocorrelation)
from that regression model. The methods which are used to remove autocorrelation are given
below:
1. After adding one (or more periods) lag of dependent variable in the right side of model, the
serial correlation will be removed
i.e, y=a0+a1*x1+a2*x2+a3*x3+a4*lag1(y)+error
2. The second method which is used to remove the autocorrelation from the data is “first
differenced method”
Step 1. Convert all the variables into first differenced
Step 2. Then run the regression (Differenced variable) model through the origin.

Question No 7
Explain white noise in the data.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

White noise in the data:

We can define white noise as there is no serial correlation in the data. In other words we can say
that if there is no auto correlation problem in the data then data is white noise.
The white noise has following features in the data is:
1. Residual variable is the white noise meaning that there is no serial correlation residuals are
homoscedastic and mean of the residual is zero
2. Residual variable is random or independent
3. Data must be stationary for good regression.

Question No 8
what are the tests to test serial correlation.
Tests to test serial correlation:
If we want to check whether there is serial correlation exists in the data or not:
 In time series data the test which is used to test serial correlation is Durbin watson test.
The null hypothesis for serial correlation is:
Ho: residuals are not serially correlated
And command is: test obs, yearly
Estat durbinalt
if p-value greater than 0.05 then there is no serial correlation in the data
 In panel data the test which is used to test serial correlation is Pesaran test.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Question No 9

Interpret the structural model ?

Fashion consciousness and materialism highly associated materialism and assertiveness also find
positive but weak. Assertiveness and fashion consciousness is same. Conservatism and hedonism
are negatively associated. Fashion consciousnesses , materialism and assertiveness are associated
with hedonism. Fashion consciousness and assertiveness are not associative with conservatism.

Question No 10
What are the indicators?
1- conservatism
2- hedonism

Question No 11
What are the factors
1- fashion consciousness
2- materialism
3- assertiveness
Question No 12
Explain loadings.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

V20 is less impacted on fashion consciousness instead of that v13 is more impacting materialism
and fashion consciousness are more positively associated. Assertiveness and hedonism are
positively associated however conservatism and materialism are negatively associated same as
with hedonism. V6 is the more impacting variable on conservatism.

Question No 13
Interpret negative value
materialism and conservatism have negative impact of -0.25 and conservatism and hedonism
have also negative effect of -0.29

Question No 14
Analyze these data using EFA and varimax rotation procedure.

Descriptive Statistics
Mean Std. Analysis
Deviation N
v1 4.3200 1.86458 25
v2 4.0400 1.85921 25
v3 3.9600 1.79072 25
v4 3.9200 1.80093 25
v5 3.8400 1.92959 25
v6 4.1600 1.84120 25
v7 4.2000 1.89297 25
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Now you see that the S.D value must be 1 that means respondent answer the question without
biasness. If S.D is zero that remove that question.

Correlation Matrixa
v1 v2 v3 v4 v5 v6 v7
v1 1.000 -.004 .628 .082 .675 -.100 -.338
v2 -.004 1.000 .151 -.248 .048 .582 -.251
v3 .628 .151 1.000 -.182 .480 .090 -.588
Correlatio
v4 .082 -.248 -.182 1.000 .272 .017 .469
n
v5 .675 .048 .480 .272 1.000 -.110 -.082
v6 -.100 .582 .090 .017 -.110 1.000 .014
v7 -.338 -.251 -.588 .469 -.082 .014 1.000
a. Determinant = .062
Correlation matrix is the square matrix of all variables. Diagonal value must be 1 and its your
choice you value below the diagonal or above the diagonal and these value must be greater than .
5 that means your factor are reliable.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling .550
Adequacy.
Approx. Chi-Square 57.994
Bartlett's Test of
Df 21
Sphericity
Sig. .000
Bartlet test tell us the questions have strong relationship. That means your question are related to
the variables. The bartlet value must be less from .05 that is significant.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Anti-image Matrices
v1 v2 v3 v4 v5 v6 v7
v1 .404 .044 -.124 -.037 -.202 .014 .071
v2 .044 .514 .078 .155 -.139 -.340 .126
v3 -.124 .078 .378 .077 -.126 -.135 .204
Anti-image
v4 -.037 .155 .077 .618 -.156 -.137 -.154
Covariance
v5 -.202 -.139 -.126 -.156 .412 .136 -.109
v6 .014 -.340 -.135 -.137 .136 .536 -.114
v7 .071 .126 .204 -.154 -.109 -.114 .463
a
v1 .716 .097 -.318 -.075 -.495 .029 .165
a
v2 .097 .414 .176 .274 -.301 -.648 .259
a
v3 -.318 .176 .638 .159 -.319 -.299 .489
Anti-image a
v4 -.075 .274 .159 .537 -.308 -.238 -.288
Correlation a
v5 -.495 -.301 -.319 -.308 .535 .290 -.249
a
v6 .029 -.648 -.299 -.238 .290 .345 -.229
v7 .165 .259 .489 -.288 -.249 -.229 .586a
a. Measures of Sampling Adequacy(MSA)
In this you see the anti-image matrix. In this you also see the diagonal value must be greater than
.5 and the other from the above or below it must be it must be greater than .5

Total Variance Explained

 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Componen Initial Eigenvalues Extraction Sums of Rotation Sums of Squared

t Squared Loadings Loadings
Total % of Cumulativ Total % of Cumulativ Total % of Cumulativ
Varianc e% Varianc e% Varianc e%
e e e
2.48 35.505 35.505 2.48 35.505 35.505 2.31 33.076 33.076
1
5 5 5
1.82 26.013 61.518 1.82 26.013 61.518 1.73 24.729 57.805
2
1 1 1
1.33 19.131 80.649 1.33 19.131 80.649 1.59 22.844 80.649
3
9 9 9
4 .508 7.258 87.907
5 .376 5.373 93.280
6 .279 3.990 97.270
7 .191 2.730 100.000
Extraction Method: Principal Component Analysis.
In this you see that only three factors explain your 80% of your data.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

In scree plot from the L-Bow only 3 factor explain your whole data
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Rotated Component Matrixa

Component
1 2 3
v1 .897
v5 .868
v3 .762
v4 .867
v7 .817
v6 .911
v2 .860
Extraction Method: Principal
Component Analysis.
Rotation Method: Varimax with
Kaiser Normalization.
a. Rotation converged in 4 iterations.

Now you see that v1 v5 v3 these factor is about household behavior and v4 v7 shopping
behavior and the v6 v2 is life style.
V1-.897
V5-.868 Household behavior
V3-.762
V4-.867 Shopping behavior
V7-.817
V6-.911 Life style
V2-.860
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Question No 15
Draw path diagram of EFA using AMOS.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Question No 16
Interpret the results.

Regression Weights: (Group number 1 - Default model)

Estimate S.E. C.R. P Label

v1 <--- 1 1.000
v5 <--- 1 .839 .240 3.491 *** par_1
v3 <--- 1 .702 .219 3.202 .001 par_2
v4 <--- 2 1.000
v7 <--- 2 .004 .681 .006 .995 par_3
v6 <--- 3 1.000
v2 <--- 3 .017 1.270 .013 .990 par_4
Interpretation:
The above table shows that V1,V5 and V3 is significantly explained on factor 1 because the p-
values are insignificant.
The table also shows that V4 and V7 does not significantly explained on factor 2 because p-value
is greater than 0.05
The table also shows that V6 and V2 does significantly explained on factor 3 because p-value is
greater than 0.05.