The estimation of a labour demand for Barbados over the period 1970 to 1996 yields: ,...

  

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The estimation of a labour demand for Barbados over the period 1970 to 1996 yields: î, = -0.304-0.143 wr, +0.734 gdp, +0.0003 nis, R² = 0.917 D.W. = 0.742 RSS=0.0225 F = 84.715 Var (B) = 0.2565 -0.0072 0.0046 -0.0452 0.0010 0.0081 0.0084 0.0002 -0.0017 0.0005 where : natural logarithm of total employment wr: natural logarithm of real wage index gdp:natural logarithm of real gross domestic product nis: natural logarithm of index of contribution of employers to national insurance t: time index RSS: residual sums of squares a) b) c) Evaluate the statistical significance of the results. Use a = 5% throughout. 10 marks A regression of 1, on the original regressors, and a constant term yields the following statistics: R² = 0.950687 and RSS = 0.013347. Conduct a relevant test for omitted variables. Note that the coefficient of ?? has a t-statistic of 3.876. 5 marks A researcher argues that wr, is endogenous. Indicate a test statistic to evaluate his position, explain how to implement the test and provide the consequences of endogeneity. 5 marks Critical values 241 d, (27,3)=1.16; d (27,3)=1.65;d, (26,3)=1.14;d (26,3)=1.65; t(24,0.025)=2.064; t(23, 0.025)=2.069; t(22,0.025) = 2.074; t(24,0.05) = 1.711; t(23,0.05)=1.714; (22,0.05) = 1.717; F(3,23) = 3.03; F(3,24)=3.01; F(1,23) = 4.28; F(1,22) = 4.30; x = 3.84; x² = 5.99; 2 The estimation of a labour demand for Barbados over the period 1970 to 1996 yields: î, = -0.304-0.143 wr, +0.734 gdp, +0.0003 nis, R² = 0.917 D.W. = 0.742 RSS=0.0225 F = 84.715 Var (B) = 0.2565 -0.0072 0.0046 -0.0452 0.0010 0.0081 0.0084 0.0002 -0.0017 0.0005 where : natural logarithm of total employment wr: natural logarithm of real wage index gdp:natural logarithm of real gross domestic product nis: natural logarithm of index of contribution of employers to national insurance t: time index RSS: residual sums of squares a) b) c) Evaluate the statistical significance of the results. Use a = 5% throughout. 10 marks A regression of 1, on the original regressors, and a constant term yields the following statistics: R² = 0.950687 and RSS = 0.013347. Conduct a relevant test for omitted variables. Note that the coefficient of ?? has a t-statistic of 3.876. 5 marks A researcher argues that wr, is endogenous. Indicate a test statistic to evaluate his position, explain how to implement the test and provide the consequences of endogeneity. 5 marks Critical values 241 d, (27,3)=1.16; d (27,3)=1.65;d, (26,3)=1.14;d (26,3)=1.65; t(24,0.025)=2.064; t(23, 0.025)=2.069; t(22,0.025) = 2.074; t(24,0.05) = 1.711; t(23,0.05)=1.714; (22,0.05) = 1.717; F(3,23) = 3.03; F(3,24)=3.01; F(1,23) = 4.28; F(1,22) = 4.30; x = 3.84; x² = 5.99; 2

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a Evaluate the statistical significance of the results Use a 5 throughout 10 marks The estimation of a labour demand for Barbados over the period 1970 to 1996 yields results that are statistically sig... View the full answer