A model has been estimated using data for different markets and the following di

Question

A model has been estimated using data for different markets and the following diagnostic results have been obtained for each. Explain what the problem for your model is and what you would do to rectify it, in each of the following scenarios (Note: all scenarios are based on different series, ie there is no connection between problems). a. 20 Series: Residuals Sample 199404 1998:11 Observatons 56 15 Median Maximumm Minimum Std. Dev Skewness Kurtosis 7.19E-17 -0.00436 0.397601 024837 0.1038 0.671041 598334 10 Jarque Bera 2497028 [5 marks] -02 -0.1 00 0.1 02 03 04 b. White Heteroskedasticity Test: F-statistic 3.394480 Probability 0.003734 Obs'R-squared 20.50718 Probability 0.008578

Explanation / Answer

a) Here we see a outlier. But if we ewmove this outlier then see that, the residual follows a nrmal distribution. And the mean is nearly eqaul to zero 0. And Median = Mean= Mode = 0.

Then we conclude that the model accuratly fit to data. Because here observed and estimated values are nearly same.

b) Here p-value of F-statistic is less than 0.05 i.e. null hypothesis rejected and R-squared value is <0.3, So we conclude that , Regression model not accuratly fit to data.

Because here Null hypothesis : proposed regression model fits the data well

VS Alternative Hyapothesis : proposed regression model not fits the data well.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.