BA 213: Introductory Econometrics

Assignment 10
Deadline: May 7, 2020 (11:55 PM)

Q35. Consider the data given below:

∑ 𝑥22 = 12; ∑ 𝑥2 𝑥3 = 8; ∑ 𝑥32 = 12; ∑ 𝑦𝑥2 = 10; ∑ 𝑦 2 =
10; ∑ 𝑦𝑥3 = 8 𝑎𝑛𝑑 𝑛 = 23
Compute:
̂2 , 𝛽
𝛽 ̂3 , 𝑅 2 , standard errors of 𝛽
̂2 , 𝛽 ̂2 , 𝛽̂
̂3 𝑎𝑛𝑑 𝑐𝑜𝑣𝑎𝑟𝑖𝑎𝑛𝑐𝑒 (𝛽 3 ).

Q36. What is Adjusted R2? What are the key features of adjusted R2?

Q37.

Q38. Prove the following results for a 3-variable linear regression model:
1. 𝑦̂𝑖 = 𝛽̂2 𝑥2𝑖 + 𝛽̂3 𝑥3𝑖
2. ∑ 𝑦𝑖2 = ∑ 𝑢̂𝑖2 + 𝛽̂2 ∑ 𝑥2𝑖 𝑦𝑖 + 𝛽̂3 ∑ 𝑥3𝑖 𝑦𝑖