Question: d) Given these findings, and given that intrate only changes 8 times in 78 months, would you recommend taking first differences for this regression? Explain.


d) Given these findings, and given that intrate only changes 8 times in 78 months, would you recommend taking first differences for this regression? Explain. Consider the following dataset and regression Variable name Label Inpg Log value of US exports to Mexico Intrate Log of Mexico's tariffs on US exports to Mexico time Month number regress Inpg Intrate time Coef. Std. Err. t P>It! [95% Conf. Intervall Inpa Intrate time! cons | -1.502397 .0043872 9.329039 .3092717 .0007396 1.253627 -4.86 0.000 5.93 0.000 7.44 0.000 -2.118498 .0029138 6.831687 -.886296 .0058606 11.82639 al Sunn dfuller Intrate, trend Dickey-Fuller test for unit root Number of obs 77 Test Statistic Interpolated Dickey-Fuller 1% Critical 5% Critical 10% Critical Value Value Value z(t) -0.164 -4.091 -3.473 -3.164 MacKinnon approximate p-value for 2(t) - 0.9921 dfuller Inpq, trend Dickey-Fuller test for unit root Number of obs 77 Interpolated Dickey-Fuller Test 1% Critical 58 Critical 10% Critical Statistic Value Value Value z (t) -4.364 -4.091 -3.473 -3.164 Mackinnon approximate p-value for 2 (t) - 0.0025 d) Given these findings, and given that intrate only changes 8 times in 78 months, would you recommend taking first differences for this regression? Explain. Consider the following dataset and regression Variable name Label Inpg Log value of US exports to Mexico Intrate Log of Mexico's tariffs on US exports to Mexico time Month number regress Inpg Intrate time Coef. Std. Err. t P>It! [95% Conf. Intervall Inpa Intrate time! cons | -1.502397 .0043872 9.329039 .3092717 .0007396 1.253627 -4.86 0.000 5.93 0.000 7.44 0.000 -2.118498 .0029138 6.831687 -.886296 .0058606 11.82639 al Sunn dfuller Intrate, trend Dickey-Fuller test for unit root Number of obs 77 Test Statistic Interpolated Dickey-Fuller 1% Critical 5% Critical 10% Critical Value Value Value z(t) -0.164 -4.091 -3.473 -3.164 MacKinnon approximate p-value for 2(t) - 0.9921 dfuller Inpq, trend Dickey-Fuller test for unit root Number of obs 77 Interpolated Dickey-Fuller Test 1% Critical 58 Critical 10% Critical Statistic Value Value Value z (t) -4.364 -4.091 -3.473 -3.164 Mackinnon approximate p-value for 2 (t) - 0.0025
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