Estimate the values of the dependent variable, Applied Statistics

Assignment Help:

1. Suppose you are estimating the imports (from both the U.S. mainland and foreign countries) of fuels and petroleum products in Hawaii (the dependent variable). The values of the dependent variable from 1958 to 2008 are provided in the attached EXCEL file. According to economic theory, imports are affected by total personal income or disposable personal income. In addition, since Hawaii's energy consumption is mainly rely on imported crude oil, the prices of crude oil should also affect the values of imported fuels and petroleum products. The historical data of some potential independent variables (some are relevant, some are irrelevant) from 1958 to 2008 are also provided in the EXCEL file. Based on these data, please do the following:

a. Develop a linear or log-linear (double-log or convert both the DV and the IVs into LN(Y) and LN(X1), LN(X2)...) regression model to estimate the dependent variable based on the data provided in the EXCEL file. Select the independent variables (only include the relevant variables) and the forms (linear or log-linear). [Hint: you should try alternative combinations of independent variables and the regression model with highest Adjusted R Squared Value and all significant independent variables (the P-values of the independent variables should be less than 0.1) should be selected as the best model.] Run the regression models using data from 1958 to 2008.

b. Estimate the values of the dependent variable from 2006 to 2008 using your regression models (both linear and log-linear) and the values of the independent variables provided in the EXCEL file.

c. Calculate the forecasting errors from 2006-2008 based on the mean of absolute errors (MAE) [also called mean absolute deviation or MAD]. The MAE is calculated as follows: first calculate the forecast errors (the actual value of the dependent variable minus the forecasted values of the dependent variable) in each year (2006-2008), and then calculated the average values of the absolute values of the errors. Based on the MAE, which model do you recommend?

d. Run a regression using crude oil price as the only independent variable. Assuming crude oil price in 2009 and 2010 will be $70/BBL and $80/BBL, respectively, forecast the imports of fuels and petroleum products in Hawaii in 2009 and 2010.


Related Discussions:- Estimate the values of the dependent variable

Deviation measures, Deviation Measures The drawback of the range as a m...

Deviation Measures The drawback of the range as a measure of dispersion is that it takes into account the values of only two data points - the largest and the smallest. One

Write out the estimator of the linear combination, Now, let's look at a dif...

Now, let's look at a different linear combination. Suppose we are interested n comparing the average mean log income for no college education ( 16). 1. Write out the linear com

STATISTICS, Ask 3. Precision Manufacturing has a government contract to pro...

Ask 3. Precision Manufacturing has a government contract to produce stainless steel rods for use in military aircraft. Each rod is required to be 20 millimeters in diameter. Each

Difference in goals between pca and fa, In PCA the eigknvalues must ultimat...

In PCA the eigknvalues must ultimately account for all of the variance. There is no probability,'no hypothesis, no test because strictly speaking PCA is not a statistical procedure

Probability, 1 A penny is tossed 5 times. a. Find the chance that the 5th t...

1 A penny is tossed 5 times. a. Find the chance that the 5th toss is a head b. Find the chance that the 5th toss is a head, given the first 4 are tails.

Hypothesis testing, the president of a certain firm concerned about the saf...

the president of a certain firm concerned about the safety record of the firms employee sets aside $50 million a year for safety education. the firms accountant believes that more

Box plots, This box plot displays the diversity wfood; the data ranges from...

This box plot displays the diversity wfood; the data ranges from 0.05710 being the minimum value and 0.78900 being the maximum value. The box plot is slightly positively skewed at

Calculation for continuous series or grouped data, Calculation for Continuo...

Calculation for Continuous Series or Grouped Data = where, m = mid-point of class   =

Mean deviation, First Moment of Dispersion or Mean Deviation Mean devia...

First Moment of Dispersion or Mean Deviation Mean deviation or the average deviation is the measure if dispersion which   is based upon all the items in a variable .It is the a

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd