[This question paper contains 12 printed pages.

]
Your Roll No ................

[Link]. ofQuestionpaper : 7491 J

Unique Paper Code 22.72202402

Name of the Paper Basic Econometrics .

Name of the Course BA (Prog.) Economics DSC: A 0R 8

Semester IV

Duratio.n : 3 Hours Maximum Marks : 90

" Instructions for Candidates

1. Write your Roll No. on [Link] immediately on receipt of this question paper.

Answer any Five questions out of Six.

3. AIL questioris carry equal marks.

4. Use of simple non-prograpmable calculator is allowed. Statistical tables arec attached

for your reference.

5. Answers may be written either in English or Hindi; but the same medium should
` be used throughout the paper.

iFTat i± iatr iaaFT

I. iH RT_TT¥ i* iin [Link] rfeinq{ 6rm fflgiv rm I

2. [Link] I

3. whwh+i*3fqTiFTFTa.i .

4. H{adr-vitrfu agiv fflwh rich en5alfr € I fflTqa di i* ifrHffirfurfe

wh¥1
5. =ai]H-Tia 5T3at enHianianvi5 [Link], [Link]&ch
• rfu I.

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7491

1. (a) Consider the following regression equation

^
Gi i 3.2 + 0.07Ti

R2 - 0.632
a Where G; = G°rade of students in econometrics course

T± = Total number of hours spent studying [Link]

Inteapret the regression coefficients` and the value of the coefficient of

detemination. What is the grade of student who ha.s spent 55 hours studying
econometrics?

a) Briefly explain the relationship between Total, Explained and Residual

• Sum of Squares in a two variable regression model given by

Yi -Po + PIxi + €i.

(c) Discuss any three assumptictns of the Classical Linear R9gression Model.
(6x3-18)

2. (a) The price of refrigerators is determined by the following regression equatiori

Y£ = 240.32 + 7.653X2t + 19.729X3£

se (3.082). (8.992)

R2 -0.81

n -19 .

Where, Y = the price of refrigerators ([Link])

X2 = the energy [Link] rating of refrigerator

X3 =.capacity of refrigerator (in liters) . .

se = standard error

The variables X2 and X3 are expected to have positive [Link]. Create

and test the appropriate hypothesis to evaluate these expectations at 5-
percent level of significance.
7491.

(b) A researcher wants..to find the [Link] annual salary (Rs. `0000)
received by employee of a .firm and trieir work [Link] (years) using the
equation. Salary± = Po =. +. I)[Experience£ + g£. The sample data collected is
given in the table below.

Salay 20 30 15 80 10 70 120 45 59

Experience 5 7 3 18 2 15 30. 10 13

Estimate the slope and intercept coefficients using the Ordinarty Least Square
method.

(c) Explain. briefly the unt;iased and miiimum variance properties of ordinary
least squares estimators. (6x3=18}

3. (a) Consider the following regression equation

Y£ = 590.3 + 14.5X2£ + 18.5X3.i

se= (9.08) (8.5)

R2-0.79

Where, Y = monthly salary of an analyst in an organization (in S)

X2 = years wiorked by the analyst in an organization

: . X3 = total work experienc.e of the analyst (in years)

se = [Link]

• If the coefficient of determination of the auxiliary regression between x2 and

X3 is 0..9, find the value of variance Inflation Factor. What are the adverse
effects of quulticol.1in6ality on a regression model fitted to a sample?

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7491

a) Briefly explain different forms of heteroskedasticity found in cross sectional

datasets.

(c) Consider the. following model of School teacher [Link] in the Northern,
Southern and Western regions of the country : .

wages; = p[ + p2D2£ + 'p3D3i + ui

Where,
i.

D2£ = 1 if the school is in Northern region

= 0 otherwis;

D3£ = 1 if the school is in Western region

= 0 otherwise

Wages = Wages of school teachers in rupees

Interpret the coefficients and determine the mean wages [Link] teachers
in all the three regions [Link] country. . (6X3=18)

4. (a) Briefly describe a few methods [Link] to remedy problem ofmulticollinearity,

in regression models.

(b) Consider the following regression output :

Y£ = 102,192 -9075N£ + 0.3547P£ + 1.2t88I£

(2053) (0.0727) (0.543)

N=33 R2=.579
7491

Where'

Y; = gross sales volume .at "Dine Out" restaurant

N£ = Coinpetition: the number of [Link] market competitors within

a two-mile radius of the "Dine Out" restauiant's [Link]

P£ = Population: the number of people living within a three-mile

radius of the "Dine Out" restaurint location

I; = Income: the average household income of the population

measured in dollars

An auxiliary regression with the squared [Link] the above model as

dependent variable on competition, population, income, square of coripetition,
square of population, square of [Link], cross prodrict of competition an.d

[Link], cross product of population and income, and cross product, of

• income and competition is estimated. It was found .that R-square of this

auxiliary regression is 0.0441. Test for heteroscedasticity at 50/o level of

significance.

(c) What are the consequences of omitting the interceptsterln from a .regression
model. (6`x3=18)

5. (a) Consider a model of annual employee earnings as.a funftion of the age of
each employee and education..

EarTa:irgs, = 5.83 + 0.32Age£ -0.0015Ag€2{ + 6.23EdttccL£€o7i£

Interpret tfie coefficients of Age and Age2 in the above estimated model.
Also graph the above estimated function holding education constant.`

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7491

(b) Explain the concept of concurrent regressions, coincident regressions, parallel

regressions and dissimilar regressions in the context of Dummy Variables..

(c) Explain the [Link] [Link] Jarque-Bera test for evaluatin,g the normality
assumption of error terms in [Link] [Link]. (6x3=18)

6.... (a) The-production function for ouq?ut Q as a double Log function of labour (L)

and capital (K) is :

1nQ£ =.Po + f}]1nL£,+ P21nK£ + .sj

A research;r investigated the [Link] Characteristics of wheat and rice

industries and obtained the following estilnates.

hdustry
-
flo
-
¢1 ¢2 R2

VAeat 0.97 0.92 0.12 I 0.98

RIce 2.70 0.59 0.33 0.80

What are the partial elasticities of output with respect to labour and .capital
for each. industry as per the estimates? Explain the economic significance of

for the two industries .considered in the above regression.

(61+82)

(b) Explain the concept [Link] arid impute serial correlation using suitable
examples.

(c) What are the assumptions of Durbin Watson test ,of serial correlation? Also
explain the relationship between the Durbin Watson statistic and the coefficient
of serial correlation using suitable examples. (6x3=18)
7491'

i+ (tit) RHrtlRqd HffroHfro tT{ ifro rm:

ZJ

Gi = 3.2 + 0.07Ti

R2-0.632

rd. G£D= ENqT5eRT$5TaTchife¥ .

T± = 8TQffra 5T 3TcaqF ed [Link] fiap Trg q5a ch th wh £

± giv Sit iaefro giv a i]FT tfr 6qTen qrmi utrm en fflcaqF ed
a. 55 fa ian ri Eia ffiT ire fflT i7

(RI) ¥£ = Po + P LX£ + e i i;Rr to iTq ch a{ Hifrotife a. q5a, Tap7en 6ife fflqRE qffi
a dr i} rfu ifr rfu ch rfu ti wtsF REi

(RT) `±th HffroTin ist ice drwich+ q{ ffi iftyi (6x3=i8)

2+ (H) tffifa th RE ii5alRE HffroHth €[{r iatffifa ch wh €

A

Yi = 240..32 + 7.653X2£ + 19.729X3£

se (3.082) (8..992)

R2 = 0.81

n-19

vi., y =[Link] (ffi¥)

x2 = tfife .ist ed i=tien th
X3 = ire tfr an (fa S)
• se.=-ae

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7491 8

a{x2`Gft{[Link];inch.en5rm
q5a ifr H{ qr rfu ed i± te GqgaH eden q]TFT Giro SHIFT rfum
iRE'
©

(iF) FT ihaed, Salaryj = Po = + P ]Experience£ + 8j flREifflwhed Tat trf

Er RE rm "ta ife th (€. ` oooo ) 6ir ed wi ergua (qffi) ifr fro rfeT
• aTH iFtFT tqr5Hr gi Trfu qqFT in ift ft ut rfu a+ fir TlqT ¥1
' ,,\J

q80
affl . 20 30 15 10 70 120 45 59
`7

qu. 5 3 18 2. 1'5 30 10 13

HTgr{uT XPEFT rf ian ffir wh ed -dgenF rfu eraatFT giv i5T algrtF entTael

(IT) imaT{uT iHen ed tiIrfflq# i# ifroF ck nIaH iin Ttht ifr rfu a. HrsE.
difel (6X3=18)

3. (.ff) FTrfeRTd Hffro Hfro TR iaRE giv

Y; = 590.3 + 14.5X2£ + 18.5X3{

se = (9.08) (8.5)

R2 -0.79

ri, y =O`qqTrfutiiads.i5Tifein¥ (S E)

x2 = iadr RT fro S ifu iiq ed i* of ¥i.

x3 = faTaRE [Link] ed fflIrq a (rd S)

se =,TTTFT ae .
7491 9

qRx23itx3rithhaHifroairfufflgiv-0.9€,chiaRT©
qT{qTiRTfawhREifanrdq{itrifuiTqTffroifeqtqgrqiqaT
i}ifflHPeRTafaa.7 '

(RI) rfu aqrm ire ¥ tng wh ri -aE`ie:3-§rtefoc`[ a faiin wh+ ifr rfu fi iqTen
EHRE]

(TT) ch a 3ca, RE 3ft{ TRE an+ S xp faerEfr. i} aFT i% iawiraRq-a ire TIT
fa" rm :.
Wages£ = P] + P2D.2i + P.3D3i + ui

D2£ = 1 rfe xp 3th ha ¥ .ire a

-``0 gil

D3; = 1 rfe xp qRE ha a ifro €

- 0 3TFT

Wages = xp faeras ffl wh S aFT

• giv ift iFren RE giv ed ifr an. an S xp fimaq# S itr afro in ffla
aREi (6x3=i8 ).

4. (iFT) thinrifedi S qgrqFqen th HqfflT th enrm®ifr to Hgr i55 iEN iHT rfu
ti qupr rfu[

P.T.O.
 G

7491 10

(iF) riiffa-rgivi Hffro enGEgr q{ iaRT eifty :

Y£ = 102,192 -9075Nj + 0.3547P£ + 1.28?If

(2053) (0.072.7) (0.543)

N = 33 R2 = .579

ffi,
y± = `T5igF ensr' RE ian irfu gr qrm %i

Nj = Hfch:. "STFT en3r" RE a tr th itgr a wh a. Hffler

illiHR HRFTrm ith rfu

p£ = ffiFREin: "€Tor 3Her» ae ifr th ife iE fflat S ed wh

an.. th in

. 1£ = eriq:: 6Trfu. th ire S ife vifa an

Hffrofi, GTrfu, enq, edislf i5r ut, fiFTrfu ffl ri, er!H en of , Hife# 3ft{

GFTchfflrfuT3RE,GTrfu3ifearizTenifei5FTTa,aeFrariF6ifeHfchifrife

tRETR..errfhaataFTS+inifei}[Link]±
iFragrFTanTqrrm%iqarfuiraTifaREmaaTHffroffi+er!r-RIino.0441

¥i 5% wi ifr RIr tT¥ ae© en `RE rmi

(Tr.) Hffroife fa €rfuFT Hter [Link] ia iRET th ae ¥7 (6x3=i8 )

7491 11

5. (iFT) HdrqRE tfr a]Tg [Link] orqrffaqffi RE aifa

TR iaRT armi .

ECL7T7#tgs[=5.83+0.32Agg{-0.0015Age2£+6.23Edttcafzo7t£

Eqha giv ire a' Age 3ife Age2 ifr gil. th qrm tfrisl iin ch ida
wh * 3qha ar5HTFtr Tin iFT rfu th fro irmi

(iF) th a{ a ffi S RE Hfin, th Hfro, qHfrfu Tffro 8ft{ fflaqFT

Tin ch an- ch RE rmi a

(Tr)[Link]%givaigivfflE-inifemtfratTr®
an th qTen iani (6x3=i; )

6. - (EFT) aFT (L) 6ft{ th (K) a ais{ rfu TRTifr RI E en3rga Q i}.to 3fflTan ThFT

1nQ£ = Po + P£1nL{ + P21nK{ +. 8£

'¥iitchrfu}ng3iraTqa3an.dit3iREiaftwhirfuwhqfr3itia-i+rtlLRqtl

qu RE ike,

rfu. .-
Po.
-
P1 #2 R2

ng® 0.97 0.92 0.12 0.98

IRE 2,.70 0.59 0.33 0.80

P.T.O.
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