Reference no: EM133235608

Using the data on Cotton prices given, area is the area under cotton production, bstocks is the stock of cotton brought forward from the previous year, dconsumption is the domestic consumption of cotton, Endstock is the end of year stock, export the exports of cotton, production is the production levels for a given year, supply is the total cotton supply in a given year, yield is the annual yield per year, Cotlook A is the cotton price quoted on the international market, Zimprice is the Zimbabwean price for cotton, Stocktouse is the variable showing stock to use levels, lib is the liberalization variable, Pricediff is the price difference between the Cotlook A and Zimprice

Comment on the theoretical relationship among the variables given above

Suggest an appropriate econometric or statistical model necessary to analyse cotton exports behavior using the data above. Justify the choice of your model.

Compute the descriptive statistics for the data and comment on the results.

Test for stationarity of the variables and comment on the results

Check for multi-collinearity of the regressors in your model in 2 above, hence explain the effect of multi-collinearity.

Run a regression model in (2) and comment on the results.

Explain the differences between the parametric statistical model and nonparametric models. Give examples.