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

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97

CHAPTER 4

Exercise Solutions

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

RSST

(c) From

22

2ˆˆ

()

11

i

eNK

RSST SST

we have,

2

2(1 ) 552.36 (1 0.7911)

ˆ6.4104

(20 2)

SST R

NK

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.