Question: Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981: And Compare the estimates on the interaction term y81-nearinc

Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981:
Using the data in KIELMC.RAW, the following equations were estimated

And

Using the data in KIELMC.RAW, the following equations were estimated

Compare the estimates on the interaction term y81-nearinc with those from equation (13.9). Why are the estimates so different?

log(price) 11.49-.547 nearinc +.394 y8 nearnc (.26) 058) 321, R220 (.080) log(price) 11.18 + .563 y8 -403 y81 nearinc (.27) (.044) (067) 321, R337

Step by Step Solution

★★★★★

3.55 Rating (169 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The first equation omits the 1981 year dummy variable y81 and so does not allow any appreci... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

839-M-E-E-A (716).docx

120 KBs Word File

Students Have Also Explored These Related Econometric Questions!

Q:

Let us modify Computer Exercise C8.4 by using voting outcomes in 1990 for incumbents who were elected in 1988. Candidate A was elected in 1988 and was seeking reelection in 1990; voteA90 is Candidate...

Q:

The following equation describes the media housing price in a community in terms of amount of pollution (nox for nitrous oxide) and the average number of rooms in houses in the community (rooms): log...

Q:

The following three equations were estimated using the 1,534 observations in 401K.RAW: Which of these three models do you prefer? Way? prate 80.29+ 5.44 at269 age -00013 totemp (.78) (.52) (.045...

Q:

2 Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981: log(price) 5 11.49 2 .547 nearinc 1 .394 y81?nearinc (.26) (.058) (.080) n 5 321, R2 5 .220 and...

Q:

13.2 Using the data in KIELMC.RAW, the following equations were estimated using the years 1978 and 1981: and == log(price) 11.49.547 nearinc+ .394 y81-nearing = (.26) (.058) n = 321, R2 = .220 (.080)...

Q:

Using the data in KIELMC, the following equations were estimated using the years 1978 and 1981: log1price2 5 11.49 2 .547 nearinc 1 .394 y81# nearinc 1.262 1.0582 1.0802 n 5 321, R2 5 .220 and...

Q:

The following equations were estimated using the "kielmc" database for the years 1978 and 1981: Model 1: Model 2 Compare the estimates for the interaction term with those of the equation: Why are the...

Q:

Exercise 1 Suppose we would like to test how accurate home value assessments are in comparison to the prices that the homes ultimately sell for, i.e., test the rationality of assessments of housing...

Q:

Example 11.3 introduces Klein's Model I. Use the data file klein to answer the following questions. a. Estimate the consumption function in equation (11.17) by OLS. Comment on the signs and...

Q:

Write 2 paragraphs about Macro risks and the term structure of interest rates article. No max word count, page count, or formatting requirements but has to be submit to my tutor's work as my own....

Q:

Shawn Toy Company incurred the following costs to produce job number TB78, which consisted of 1,000 teddy bears that can walk, talk, and play cards. Direct material: 8/11/x0 Requisition number 201:...

Q:

Refer to the data in the table used for Exercises 1-4 and multiply each table-entry by 10. Using a statistics software package with a two-way analysis of variance capability, determine the effects of...

Q:

14-8 Which of the following adjustments helps to convert accrual income to operating cash flows? a. Deduct from net income all noncash expenses. b. Add to net income a decrease in inventories. c. Add...

Q:

An experiment was conducted to determine the weight gains of laboratory animal under nine feeding regimes in a completely randomized design. The treatments were defined as all combinations of factor...

Q:

"The mean of the times it takes a commuter to get to work in Baltimore is 29.7 minutes. Assume the distribution of commuter times is approximately bellshaped. (a) If the standard deviation is 6...

Q:

The following graph shows the U.S. passenger airlines accident report for the years 20002007. How many accidents were there in this 8-year time span?

Q:

Prove that if f: Rn Rm is differentiable at a Rn, then it is continuous at a.

Q:

Using the following data, calculate the planned and actual monthly budgets through the end of June. Assume the project is planned for a 12 -month duration and $300,000 budget. All costs are in $000....

Q:

True or False The following is a valid probability distribution. 11 12 13 14 P(z) 0.29 0.47 -0.14 0.48 Select one: O True O False

Q:

Consider the following information on a portfolio of three stocks: State of Economy Probability of State of Economy Stock A Rate of Return Stock B Rate of Return Stock C Rate of Return Boom .14 .09...