will have 7 questions – 4 will ask you to run a short Stata regression of the form:
Question Description
Some Info for the assignment
will have 7 questions – 4 will ask you to run a short Stata regression of the form:
. regress y x1 x2 x3
or . pwcorr x1 x2 x3
After running the regression or correlation, you will be able to answer the question based on the Stata output.
An example would be something like:
Given the following data, are y and rationing related to c. Where y = income c = consumption.
Run the regression and answer the question based on your Stata output.
Then the data would look like the following:
year y c rationing
1929 4091 3868 0
1930 3727 3569 0
1931 3534 3400 0
1932 3043 3081 0
1933 2950 3013 0
1934 3100 3088 0
1935 3359 3236 0
1936 3738 3523 0
1937 3836 3628 0
1938 3557 3517 0
……………………….
The following regression would look like:
. reg c y rationing
Source | SS df MS Number of obs = 32
————-+———————————- F(2, 29) = 213.37
Model | 18762774.9 2 9381387.45 Prob > F = 0.0000
Residual | 1275062.98 29 43967.6891 R-squared = 0.9364
————-+———————————- Adj R-squared = 0.9320
Total | 20037837.9 31 646381.867 Root MSE = 209.68
——————————————————————————
c | Coef. Std. Err. t P>|t| [95% Conf. Interval]
————-+—————————————————————-
y | .8086736 .0391749 20.64 0.000 .7285519 .8887952
rationing | -610.0382 114.895 -5.31 0.000 -845.025 -375.0515
_cons | 557.0569 185.5583 3.00 0.005 177.5476 936.5662
——————————————————————————
The important thing to note is whether or not the p-value of each of the independent variables indicates significance. Recall if the p-value is less than 0.05, the variable to which the p-value is attached is considered significant.
So for the above regression, y, rationing and the intercept _cons all have p-values less than 0.05 and thus are significant variables which have an effect on c – consumption.
Yes to the linear regression: You will only need to run: . regress Y X1 X2 X3 ….
and . pwcorr.
Chapter 12 is the key in Daniels and Minot – correlation and regression.
3 questions on correlation
4 questions on regression
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