DATASET 1
Table 1 gives data for real consumption expenditure, real income, real wealth, and real interest rates
for country X for the years 1947-2000.
TABLE 1: REAL CONSUMPTION EXPENDITURE, REAL INCOME, REAL WEALTH, AND REAL INTEREST RATES FOR COUNTRY X, 1947-2000
|
Year |
Consumption Expenditure (C) |
Income (Yd) |
Wealth (W) |
Interest Rate (R) |
|
1947 |
976.4 |
1035.2 |
5166.8 |
-10.351 |
|
1948 |
998.1 |
1090.0 |
5280.8 |
-4.720 |
|
1949 |
1025.3 |
1095.6 |
5607.4 |
1.044 |
|
1950 |
1090.9 |
1192.7 |
5759.5 |
0.407 |
|
1951 |
1107.1 |
1227.0 |
6086.1 |
-5.283 |
|
1952 |
1142.4 |
1266.8 |
6243.9 |
-0.277 |
|
1953 |
1197.2 |
1327.5 |
6355.6 |
0.561 |
|
1954 |
1221.9 |
1344.0 |
6797.0 |
-0.138 |
|
1955 |
1310.4 |
1433.8 |
7172.2 |
0.262 |
|
1956 |
1348.8 |
1502.3 |
7375.2 |
-0.736 |
|
1957 |
1381.8 |
1539.5 |
7315.3 |
-0.261 |
|
1958 |
1393.0 |
1553.7 |
7870.0 |
-0.575 |
|
1959 |
1470.7 |
1623.8 |
8188.1 |
2.296 |
|
1960 |
1510.8 |
1664.8 |
8351.8 |
1.511 |
|
1961 |
1541.2 |
1720.0 |
8971.9 |
1.296 |
|
1962 |
1617.3 |
1803.5 |
9091.5 |
1.396 |
|
1963 |
1684.0 |
1871.5 |
9436.1 |
2.058 |
|
1964 |
1784.8 |
2006.9 |
10003.4 |
2.027 |
|
1965 |
1897.6 |
2131.0 |
10562.8 |
2.112 |
|
1966 |
2006.1 |
2244.6 |
10522.0 |
2.020 |
|
1967 |
2066.2 |
2340.5 |
11312.1 |
1.213 |
|
1968 |
2184.2 |
2448.2 |
12145.4 |
1.055 |
|
1969 |
2264.8 |
2524.3 |
11672.3 |
1.732 |
|
1970 |
2314.5 |
2630.0 |
11650.0 |
1.166 |
|
1971 |
2405.2 |
2745.3 |
12312.9 |
-0.712 |
|
1972 |
1550.5 |
2874.3 |
13499.9 |
-0.156 |
|
1973 |
2675.9 |
3072.3 |
13081.0 |
1.414 |
|
1974 |
2653.7 |
3051.9 |
11868.8 |
-1.043 |
|
1975 |
2710.9 |
3108.5 |
12634.4 |
-3.534 |
|
1976 |
2868.9 |
3243.5 |
13456.8 |
-0.657 |
|
1977 |
2992.1 |
3360.7 |
13786.3 |
-1.190 |
|
1978 |
3124.7 |
3527.5 |
14450.5 |
0.113 |
|
1979 |
3203.2 |
3628.6 |
15340.0 |
1.704 |
|
1980 |
3193.0 |
3658.0 |
15965.0 |
2.298 |
|
1981 |
3236.0 |
3741.1 |
15965.0 |
4.704 |
|
1982 |
3275.5 |
3791.7 |
16312.5 |
4.449 |
|
1983 |
3454.3 |
3906.9 |
16944.8 |
4.691 |
|
1984 |
3640.6 |
4207.6 |
17526.7 |
5.848 |
|
1985 |
3820.9 |
4347.8 |
19068.3 |
4.331 |
|
1986 |
3981.2 |
4486.6 |
20530.0 |
3.768 |
|
1987 |
4113.4 |
4582.5 |
21235.7 |
2.819 |
|
1988 |
4279.5 |
4784.1 |
22332.0 |
3.287 |
|
1989 |
4393.7 |
4906.5 |
23659.8 |
4.318 |
|
1990 |
4474.5 |
5014.2 |
23105.1 |
3.595 |
|
1991 |
4466.6 |
5033.0 |
24050.2 |
1.803 |
|
1992 |
4594.5 |
5189.3 |
24418.2 |
1.007 |
|
1993 |
4748.9 |
5261.3 |
25092.3 |
0.625 |
|
1994 |
4928.1 |
5397.2 |
25218.6 |
2.206 |
|
1995 |
5075.6 |
5539.1 |
27439.7 |
3.333 |
|
1996 |
5237.5 |
5677.7 |
29448.2 |
3.083 |
|
1997 |
5423.9 |
5854.5 |
32664.1 |
3.120 |
|
1998 |
5683.7 |
6168.6 |
35587.0 |
3.584 |
|
1999 |
5968.4 |
6320.0 |
39591.3 |
3.245 |
|
2000 |
6257.8 |
6539.2 |
38167.7 |
3.576 |
- Based on the regression of consumption expenditure on real income, real wealth and real interest rate, find out which of the regression coefficients are individually statistically significant at the 5 percent level of significance. What is the fitted equation?
- From the Data provided above, test for Unit Root for the variables using ADF test and Phillip-Perron Test and determine the order of integration of the variables.
- Estimate the regression Model using Stationary Data and compare your result in question one (1)
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