Question: ECONOMETRICS Question 1 (a) The following simultaneous equation model (SEM) describes the demand and supply,r for a particular good in a competitive market. Qi- :

ECONOMETRICS

Question 1 (a) The following simultaneous equation model (SEM) describes the demand and supply,r for a particular good in a competitive market. Qi- : \"113$ +Ilz +\" gr 2 a2}; +Zn +\"r2 Assuming that variables Q and P are the endogenous variables, discuss which assumptions need to be made about 21 and 22 to enable you to estimate the SEM? Note that the variables Qi and Pi are endogenous and are determined within the model. The variables Zi1 and 2:2 are exogenous and are determined outside of the model. (I1) In a logit model, measures similar to the conventional R2 also exist. Discuss the count R2 and how it is interpreted

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