11200052INTRODUCTIONTOECONOMIC- METHODS COMPUTING ASSIGNMENT

data set:

Marketer	Hours of Training	Sales Revenue
1	3	105000
2	6	150000
3	4	120000
4	3	105000
5	8	180000
6	2	90000
7	2	90000
8	10	210000
9	5	135000
10	5	135000
11	8	180000
12	3	105000
13	9	195000
14	5	135000
15	3	105000
16	7	165000
17	12	240000
18	6	150000
19	4	120000
20	4	120000
21	8	180000
22	6	150000
23	9	195000
24	10	210000
25	4	120000
26	3	105000
27	12	240000
28	9	195000
29	5	135000
30	7	165000
31	6	150000
32	3	105000
33	8	180000
34	6	150000
35	7	165000
36	3	105000
37	11	225000
38	10	210000
39	5	135000
40	5	135000
41	3	105000
42	4	120000

(Tobesubmitted at the end of Week13)

Inthisassignmentyouarerequiredtouse therelevantbuilt-infunctioninExceltoestimate a simplelinearregressionmodel.Asessential preparationforthisassignmentyoushouldhave workedthroughthecomputingexercisesets.

Supposethemanagersofatelemarketingcompanyareinterestedintherelationship between the followingtwo variables:

• Thesalesrevenueindollars(sayY)generatedbyatelemarketerinhis/herfirst year of completed service.
• Thenumberofhoursofpreliminarytrainingprovidedtoanewtelemarketer(sayX).

Usinga randomsampleofdatafor42telemarketersthatrecently completedtheirfirstyearof servicewiththecompany,youarerequiredtoestimateaconditionalexpectationfunctionof the followingform byleast squares regressionusingthe Microsoft Excel regression tool.

E(Y|X)=b1+b2X

To generateyour own personalised data set you will need to follow thesteps below.

1. Openthe'AssignmentDataGenerationFile'attachmentinthe'Computing Assignment'linkonthelefthandmenuofthevUWSsiteforthisunit.IftheExcel fileopensin'ProtectedView',justclickon'EnableEditing'beforeundertakingthefollowingsteps.

1. OnceyouhaveopenedtheDataGenerationFileinExcel,youshouldenterthelast fourdigitsofyourstudentnumberintherangeofcellsE2toH2,i.e.withthefifth digitinE2,thesixthdigitinF2,theseventhdigitinG2,andtheeighthdigitinH2. This willgenerateyourpersonaliseddatasetintherangeA1:C43(withtheheadings 'Marketer','HoursofTraining'and'SalesRevenue'inA1,B1andC1,respectively). Notethatthemarkerofyourassignmentwillbeabletocheckthatyouusethecorrect data set correspondingtoyour student number.

1. Opena newnewExcel workbookandcopythe rangeA1:C43containingyourdataset intheDataGenerationFiletothenewworkbook.ClosetheDataGenerationFile, then giveyournewExcelworkbookanameandsaveitonyourcomputerorstorage medium(memorystick,etc.).Apartfromenteringthelastfourdigitsofyourstudent numberandcopyingyourgenerateddata,youwillnotbeabletoedit theData Generation File.

Seenext page for required assignment tasks

Required Assignment Tasks

Each student is required to submitinMS Word documentformat(at the end of Week 13 to his/hertutor):

• Main Report: Answers toparts (b) to (e).
• Annexure: Asoft copy ofhis/herpart(a)(seebelow) tabulatedregressionresultsinincludingacopy ofthedatasetusedandthesummaryresultstablefromusingthebuilt-inregression toolinExcel.Studentsarenotrequiredtosubmitanylistofresiduals,residualplots orline fit plots.

a) Usethebuiltregression toolinExcelandyourpersonalizeddataset(seeabove)to estimatethesimpleregression ofsalesrevenueindollars(Y)generatedbya telemarketerinhis/herfirstyearofcompletedserviceonthenumberofhoursof preliminarytrainingprovided to anew telemarketer (X). (2 marks)

Whenansweringthefollowingquestions,assumealltheassumptionsoftheneoclassical (stochasticregressor)simpleregression(NSR)modelwithmultivariatenormallydistributed random disturbancesare satisfied.

b) Clearlystateyourestimatedconditionalexpectationfunction(sampleregressionline).

Notethatyoudonotneedtoestimateyourequationmanually,butratheryoushould simplywritedownyoursampleregressionlineusingtheestimatedinterceptand coefficient ofXgiven inyoursummaryregressionoutput from Excel. (1 mark)

c) With reference to your estimated equation, calculate (using a calculator) a 90%

confidenceintervalforthecoefficientofX(i.e.2)inthemodel. Inperformingthis calculation,usetherelevantestimatedstandarderroroftheestimatorofthe coefficientofXgiveninyoursummaryExcel regressionoutput. Givean interpretation of theconfidenceintervalyoucalculate. (2 marks)

d) Againwithreferencetoyourestimatedequation,performatestofthenullhypothesis thatthecoefficientofnumberofhoursofpreliminarytrainingprovidedtoa telemarketer(2)equalszeroagainstthealternativethatitisgreaterthanzero,using the

=0.05

(i.e. 5%) level of significance. In presenting your answer to this

questionyouarerequiredtousethe6-stephypothesistestingproceduregiveninthe unitsummarylecturenotes.Againinansweringthisquestion, youshouldusethe relevantestimatedstandarderroroftheestimator ofthecoefficientofXgiveninyour summaryExcel regression output. (3 marks)

e) Giveaninterpretationoftherealizedcoefficientofdeterminationvalue(r2)givenin yoursummaryExcel regression output. (2 marks)

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