Answer to Question #197047 in Economics for arianna

Question

Suppose you are interested in examining the effect of 𝑥 on 𝑦. The sample covers the period of 𝑡 = 1, 2, 3, … , 𝑛.

a) Suggest a research question and write the linear regression model that you would estimate. Define the variables.

b) State a hypothesis that you can test for the slope coefficient. Explain all the steps and assumptions. 

Answer 1

To study the dependence of the annual production volume Y on fixed assets X, data were obtained for 20 enterprises.

Moving on to the analysis of the calculated data, you can build a regression equation with calculated coefficients, which will express the dependence of the annual production volume on fixed assets:

The sample coefficient of determination 0.853 shows that 85.3% of the scatter of the dependent variable y is explained by the constructed regression.