"To see this more clearly, we divided the data into four time periods: 1951:01 to 1962:12; 1963:01 to 1974:12; 1975:01 to 1986:12, and 1987:01 to 1999:09: For these subperiods the mean values of the money supply (with corresponding standard deviations in parentheses) were, respectively, 165.88 (23.27), 323.20 (72.66), 788.12 (195.43), and 1099 (27.84), all figures in billions of dollars. This is a rough indication of the fact that the money supply over the entire period was not stationary.
CHAPTER ONE: THE NATURE OF REGRESSION ANALYSIS 27
Cross-Section Data Cross-section data are data on one or more variables collected at the same point in time, such as the census of population conducted by the Census Bureau every 10 years (the latest being in year 2000), the surveys of consumer expenditures conducted by the University of Michigan, and, of course, the opinion polls by Gallup and umpteen other organizations. A concrete example of cross-sectional data is given in Table 1.1 This table gives data on egg production and egg prices for the 50 states in the union for 1990 and 1991. For each year the data on the 50 states are cross-sectional data. Thus, in Table 1.1 we have two cross-sectional samples.
Just as time series data create their own special problems (because of the stationarity issue), cross-sectional data too have their own problems, specifically the problem of heterogeneity. From the data given in Table 1.1 we see that we have some states that produce huge amounts of eggs (e.g., Pennsylvania) and some that produce very little (e.g., Alaska). When we
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