I need professional with econometrics knowledge for me to complete Eviews project, Eviews software needed
LRCONS = log of real consumption of households
LRGDP = log of real GDP
LRPRICE = log of the real Halifax housing price index
The time period is from 1983Q1 to 2006Q1 (93 observations).
The purpose of this exercise is to test whether the behaviour of the housing market
affects consumption of households.
(a) Use this data set and Eviews7 to:
Estimate the model LRCO_S t = α1 + β1 LRGDPt + β 2 LRPRICE + ut
using ordinary least squares
(b) Statistical interpretation
Test that the model satisfies the assumptions of ordinary least squares of:
(i) no serial correlation of the residuals,
(ii) no heteroskedasticity
(iii) normality of the distribution of the residuals.
In each case state the null and alternative hypotheses and your conclusions. (20 marks)
(_ote: use the Breusch-Godfrey serial correlation LM test, the ARCH test and the
White Heteroskedasticity test with no cross terms. Choose 4 as the number of lags to
include when appropriate).
(c) Assuming that your model satisfies the basic assumptions:
(i)Test whether the coefficients β1 and β2 are, individually, significantly different from
zero at 5%. State the null and alternative hypotheses and your conclusions.
(ii) Test whether the coefficients β1 and β 2 are, jointly, significantly different from
zero at 5%.
State the null and alternative hypotheses and your conclusions.
(iii) Test whether the coefficient β1 is statistically equal to one at 5%. State the null
and alternative hypotheses and your conclusions. Show all the steps you have followed to
reach your conclusion.
[_ote: The critical value is 1.658]
(d) Model interpretation
(i) Briefly comment on your overall findings. Explain whether the information from your
answer to parts (b) and (c), above, suggests any weaknesses of the model and/or possible
ways it might be improved. Credit will be given for the actual implementation of