Table 3.4 gives cross-section Data for 1980 on real gross domestic product (RGDP) and aggregate energy consumption (EN) for 20 countries

(a) Enter the data and provide descriptive statistics. Plot the histograms for RGDP and EN.

Plot EN versus RGDP.

(b) Estimate the regression:

log(En) = α + βlog(RGDP) + u.

Be sure to plot the residuals. What do they show?

(c) Test H0; β = 1.

(d) One of your Energy data observations has a misplaced decimal. Multiply it by 1000. Now repeat parts (a),

(b) and (c).

(e) Was there any reason for ordering the data from the lowest to highest energy consumption?

Explain.

Lesson Learned: Always plot the residuals. Always check your data very carefully.