ASSIGNMENT OF CHAPTER 6

Assignment:
C1.1 Find R2 for the estimated consumption regression of previous
2 2
2 ∑ ^y i 2 ∑ ei
problem using the equation (a) R = 2 and (b) R =1− 2 . Also find the
∑ yi ∑ yi
results using MATLAB statements.

C1.2 Find r for the estimated consumption regression in previous problem

√
∑ xi y i ∑x y
using (a) r =√ R 2, (b) r = and (c) r = b^ 1 i 2 i . Also find the results
√ ∑ x √∑ y2
i
2
i ∑ yi
using MATLAB statements.

C1.3 Table (C1) gives the per capita income to the nearest $100 ( Y ) and the
percentage of the economy represented by agriculture ( X ) reported by the
World Bank World Development Indicators for 1999 for 15 Latin
American countries.
(a) Estimate the regression equation of Y , on X .
(b)Test at the 5% level of significance for the statistical significance of the
parameters.
(c) Find the coefficient of determination.
(d) Use MATLAB statements to compute all the computations given in (a),
(b) and (c)
(e) Report the results obtained in part (a), (b) and (c) in standard summary
form.

Table (C1)
Country (1) (2) (3) (4) (5) (6) (7) (8)
n 1 2 3 4 5 6 7 8
Yi 76 10 44 47 23 19 13 19
Xi 6 16 9 8 14 11 12 10

Country (9) (10) (11) (12) (13) (14) (15)

n 9 10 11 12 13 14 15
ASSIGNMENT OF CHAPTER 6

Yi 8 44 4 31 24 59 37
Xi 18 5 26 8 8 9 5

*Key: (1) Argentina; (2) Bolivia; (3) Brazil; (4) Chile; (5) Colombia; (6)
Dominican Republic; (7) Ecuador; (8) El Salvador; (9) Honduras; (10)
Mexico; (11) Nicaragua; (12) Panama; (13) Peru; (14) Uruguay; (15)
Venezuela.
Source: World Bank World Development Indicators.
C1.4 Draw a scatter diagram for the data in Table(C2) and determine by
inspection if there is an approximate linear relationship between Y i, and
X i.

C1.5 For the data in Table (C2, find the value of (a) b^ 1, and (b) b^ 0.
(c) Write the equation for the estimated OLS regression line.

Table (C2)
Observations on variables Y and X
n Yi Xi
1 20 2
2 28 3
3 40 5
4 45 4
5 37 3
6 52 5
7 54 7
8 43 6
9 65 7
10 56 8

C1.6 (a) On a set of axes, plot the data in Table (C2), plot the estimated OLS
regression line and show the residuals.
(b) Show algebraically that the regression line goes through point X Y .

2 2
C1.7 For the data in Table (C2) , find (a) s2 (b) sb^ and sb^ , and (c sb^ and sb^
0 0 1 1

Test at the 5% level of significance for (a) b 0 and (b) b 1.

Construct the 95% confidence interval for (a) b 0 and (b) b 1.
ASSIGNMENT OF CHAPTER 6

For the estimated OLS regression equation, find (a) R2 and (b) r .