Forecasting Project
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321 Forecasting Project
Q rose
P Rose
P carn
Events
Disp. Inc.
11484
40022
790.55
36996
953.48
34035
908.93
10079
36597
951.06
38084
981.53
35254
1092.41
33111
1024.54
36247
1039.39
37675
992.37
34114
1008.32
30277
1000.29
34621
1017.5
35936
34151
1035.1
29967
966.19
33907
A. Regression (see attached sheet)
Q Rose = -10996.61951 + -242.1563241 (P rose) + 694.5969529 (P carn) +
B. What is the critical value of t for the regression coefficients at the 5% significance level? Are each of the regression coefficients statistically significantly nonzero at the 5% significance level?
The T calculated values for the regression coefficients are the following:
Intercept
-1.190858465
P Rose
-0.478793919
P Carn
1.481633437
-0.115983959
Events
2.692316194
Disp. Inc.
0.261972384
-1.69479162
The T critical value is 2.262 at the 5% significance level. This value was found by first calculating the degrees of freedom (n-k, or 16-7=9). Then, refer to the T Distribution chart using a 5% significance level.
At this 5% significance interval, only one of the regression coefficients, Events (highlighted in green), is statistically significantly nonzero. It is the only T calculated value (2.692316194) that is greater than the T critical value (2.262).
C. What is the critical value of the F statistic at the 1% significance level and is the overall regression statistically significant? Why?
The critical F value at a 1% significance level is 5.80 [the degrees of freedom in the numerator is 6 (7-1) and the degrees of freedom in the denominator is 9 (16-7)]. The calculated F statistic found in the regression was 15.42422973 (highlighted in green on attached sheet). Because the F statistic (15.42422973) is greater than the critical F value (5.80), it proves that with 99% confidence the regression is statistically significant.
D. What is the point cross price elasticity for the last quarter (t=16)? Show your calculations.