Econometrics UE Past Papers Questions.

In a sample of 300 students there are 120 Females of which 12 are left handed and 180 Males of which 24 are left handed. It is also known that hand preference and sex are independent.

1. Find P(left Handed| Female) i.e the probability that a female student will have her left hand as prefered/ most active hand?
2. Find (P(-left Handed | Male)
3. Find P(left handled)
4. Find P(right handled| Male)
5. Find P(Right handled | Female)
6. Find P(Right Handed)
7. Find P(Left handed)+ P(Right handed)
8. Give your answer in (g.) is this a valid probability distribution?

1. Yes
2. NO

Answer / Solution

UNSOLVED

Explain the assumptions of the Classical linear regression model (CLRM) and how each of them impairs econometric estimation.

Answer / Solution

UNSOLVED

Given an account how one can simply detect and address the problem of multicollinearity.

Answer / Solution

UNSOLVED

You are working for an organization where you are asked to undertake a research that you will ultimately end up in forecasting economically the likely influence of an independent variable on the outcome/ dependent variable. What steps would you follow to undertake such an econometric assignment?

Answer / Solution

UNSOLVED

Consider 10 households with monthly consumption expenditure per capita Y and disposable income  X1. The data are as presented below.

Answer the following questions

1. Develop a mathematical model relating consumption and disposable income
2. Develop an econometric model relating consumption and income
3. Through manual computation, derive the parameter estimates, i.e intercept, b1 and the marginal propensity to consume (MPC), b2
4. Then the income increase by a unit , by how much does consumption increase?
5. Compute the coefficient of determination, r-squared, to show the percentage variation Y explained by X.

Answer / Solution

UNSOLVED