Info

$85,200

Source: American Statistical Association, "2000-2001 Salary Report of Academic Statisticians," Amstat News, Issue 282, December 2000, p. 4.

Source: American Statistical Association, "2000-2001 Salary Report of Academic Statisticians," Amstat News, Issue 282, December 2000, p. 4.

results to be different from those using sales as the regressor? Why or why not?

11.20. Table 11.8 gives data on median salaries of full professors in statistics in research universities in the United States for the academic year 2000-2001.

a. Plot median salaries against years in rank (as a measure of years of experience). For the plotting purposes, assume that the median salaries refer to the midpoint of years in rank. Thus, the salary $74,050 in the range 4-5 refers to 4.5 years in the rank, and so on. For the last group, assume that the range is 33-35.

b. Consider the following regression models:

where Y = median salary, X = year in rank (measured at midpoint of the range), and ΓΌ and v are the error terms. Can you argue why model (2) might be preferable to model (1)? From the data given, estimate both the models.

c. If you observe heteroscedasticity in model (1) but not in model (2), what conclusion would you draw? Show the necessary computations.

d. If heteroscedasticity is observed in model (2), how would you transform the data so that in the transformed model there is no het-eroscedasticity?

436 PART TWO: RELAXING THE ASSUMPTIONS OF THE CLASSICAL MODEL

11.21. You are given the following data:

RSSi based on the first 30 observations = 55, df = 25 RSS2 based on the last 30 observations = 140, df = 25

Carry out the Goldfeld-Quandt test of heteroscedasticity at the 5 percent level of significance.

11.22. Table 11.9 gives data on percent change per year for stock prices (Y) and consumer prices (X) for a cross section of 20 countries.

a. Plot the data in a scattergram.

b. Regress Y on X and examine the residuals from this regression. What do you observe?

c. Since the data for Chile seem atypical (outlier?), repeat the regression in b, dropping the data on Chile. Now examine the residuals from this regression. What do you observe?

d. If on the basis of the results in b you conclude that there was het-eroscedasticity in error variance but on the basis of the results in c you reverse your conclusion, what general conclusions do you draw?

TABLE 11.9 STOCK AND CONSUMER PRICES, POST-WORLD WAR II PERIOD (Through 1969)

Rate of change, % per year

TABLE 11.9 STOCK AND CONSUMER PRICES, POST-WORLD WAR II PERIOD (Through 1969)

Rate of change, % per year

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