# ECON 3210 Chapter Notes - Chapter 4: Econometrics, Simple Linear Regression

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9 Feb 2013
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CHAPTER 4
Exercise Solutions
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Chapter 4, Exercise Solutions, Principles of Econometrics, 4e 98
EXERCISE 4.1
(a)

2
22
ˆ182.85
1 1 0.71051
631.63
i
i
e
Ryy
  
(b) To calculate
2
R
we need

2
i
yy
,

222 2
5930.94 20 16.035 788.5155
ii
yy yNy  

Therefore,
2666.72 0.8455
788.5155
SSR

(c) From
22
2ˆˆ
()
11
i
eNK
 
we have,
2
2(1 ) 552.36 (1 0.7911)
ˆ6.4104
(20 2)
SST R
NK

 

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Chapter 4, Exercise Solutions, Principles of Econometrics, 4e 99
EXERCISE 4.2
(a) ˆ5.83 17.38
(1.23) (2.34)
yx
 where 20
x
x
(b) ˆ0.1166 0.01738
(0.0246) (0.00234)
yx
 ˆ
ˆ
where 50
y
y
(c) ˆ0.2915 0.869
(0.0615) (0.117)
yx

 ˆ
ˆ
where and
20 20
yx
yx


The values of 2
R
remain the same in all cases.
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