StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Multiple Regression Analysis: Empirical Project - Essay Example

Cite this document
Summary
This study "Multiple Regression Analysis: Empirical Project" is meant to determine the impact of increasing consumption expenditures, investments, disposable income and exports on the GDP growth. To make this a reality, economic data (secondary) is use and aim to estimate the economic model…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.7% of users find it useful
Multiple Regression Analysis: Empirical Project
Read Text Preview

Extract of sample "Multiple Regression Analysis: Empirical Project"

 Multiple Regression Analysis: Empirical Project Abstract Several factors have impacts on the GDP and they include; consumptions, investments, disposable income, exports among others. This study was meant to determine the impact of an increase consumption, investment, disposable income and exports (all in Billion Dollars) on the GDP growth. To make this a reality, economic data (secondary) was used and aimed to estimate the economic model shown below; GDP = β0 + β1C + β2I + β3PDI + β4NT In the above economic model, GDP was considered as the dependent variables (DV) while consumptions, investment, disposable income and net exports were considered as the independent variables (IV).Further, simple regression models of the nature GDP = β0 + β1ya (where yas are the IV) were estimated. From the results, investments and disposable income have a statistically significant impact on GDP while consumption and net exports are not significant at 5% level of significance. Considering each IV alone Vs GDP, then it is significant at 5% level of significance. Table of Contents Abstract 1 Table of Contents 2 List of Tables 2 List of Figures 2 Introduction 3 Literature Review 3 Data 4 Model 4 Results 4 Multiple Regression-Full Model 5 Simple Regressions 7 Conclusions 13 References 14 Appendix 15 List of Tables Table 1: Heteroskedasticity Test of the Full Model 6 Table 2: Full Model Coefficients with Robust Errors 6 Table 3: Endogenity Test Results 7 Table 4: Correlations 7 Table 5: Step-wise Regression Results 8 Table 6: Model with Consumption and GDP 8 Table 7: Model with Investments and GDP 10 Table 8: Model with Investments and GDP 11 Table 9: Model with Net Exports and GDP 13 List of Figures Figure 1: Consumption Vs GDP Line of Best Fit 9 Figure 2: GDP Vs Investments Line of Best Fit 11 Figure 3: GDP Vs Disposable Income Line of Best Fit 12 Figure 4: GDP Vs Net Exports Line of Best Fit 13 Introduction The GDP growth of a country is determined by several factors which include consumption expenditures, investments (domestic and external), disposable income, net exports (resulting from the difference between exports and imports) among many others. This study was meant to determine the impact of an increase consumption expenditures, investments, disposable income and exports on the GDP growth. To make this a reality, economic data (secondary) was used and aimed to estimate the economic model where GDP was considered as the dependent variables (DV) while consumptions, investment, disposable income and net exports were considered as the independent variables (IV). Literature Review GDP is the cumulative total amount of goods and services which a country produces within a given year. GDP growth changes year-in-year out depending on the economic conditions (amount of investments, consumption levels, disposable incomes and net exports). Other factors determine a country’s GDP growth and include stability of politics, environmental factors (global warming) and regional stability among others. According to Fischer (1993), a country’s GDP is also driven by the amount of spending the government does. Mankiw et al. (1992) supports Fischer’s argument introducing the aspect of inflation in GDP growth arguing that inflation is the phenomena of rising trends of prices in a country. As the prices go up, citizens tend to spend a lot of their savings than before. This leads lead to fewer or no savings which translates to less investment capital within a country and thus low or no GDP growth. Data Secondary data was used for this research study. This is so because it is easy to get such data as compared to survey and also since the kind of data cannot be gotten through a survey as it is historical data. However, survey data has more weight and makes tangible inferences as compared to secondary data utilized in this case. The data used here can be downloaded from: http://www.oswego.edu/~kane/econometrics/data.htm and is made up of the following variables; Year (Time variable); GDP (DV); Consumption (IV); Investments (IV); Disposable Income (IV); and Net Exports (IV). Model The study aimed at estimating the following economic model; GDP = β0 + β1C + β2I + β3PDI + β4NT. In this economic model, GDP was considered as the dependent variables (DV) while consumptions, investment, disposable income and net exports were considered as the independent variables (IV).Further, simple regression models of the nature GDP = β0 + β1ya (where yas are the IV) were estimated. These models are valid and reliable in the determination of how much the GDP changes with a unit increase in each IV holding the others (IVs) constant. Results Given that this is time series data, this first test carried out was to determine the presence of serial autocorrelation using the Durbin-Watson d-statistic (5, 74) = .3566969 (Gore & Altman 1992). From this result, it is evident that serial autocorrelation is not a problem. Further, heteroskedasticity test was carried out to determine whether the error terms of the full model have a constant variance (homoskedastic). Table 1: Heteroskedasticity Test of the Full Model From table 1 above, it is evident that the error terms of the full model do not have a constant variance; are not homoskedastic [Chi-square (14) = 46.03, p Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Multiple Regression Analysis: Empirical Project Essay, n.d.)
Multiple Regression Analysis: Empirical Project Essay. Retrieved from https://studentshare.org/macro-microeconomics/1736406-multiple-regression-analysis-empirical-project
(Multiple Regression Analysis: Empirical Project Essay)
Multiple Regression Analysis: Empirical Project Essay. https://studentshare.org/macro-microeconomics/1736406-multiple-regression-analysis-empirical-project.
“Multiple Regression Analysis: Empirical Project Essay”, n.d. https://studentshare.org/macro-microeconomics/1736406-multiple-regression-analysis-empirical-project.
  • Cited: 0 times

CHECK THESE SAMPLES OF Multiple Regression Analysis: Empirical Project

Tax Income in the United State and the United Kingdom

23 Pages (5750 words) Dissertation

An empirical analysis of manufacturing overhead cost drivers

This work is a critical analysis of the work of Rajiv Banker, Gordon Potter, and Roger Schroeder on “An empirical analysis of manufacturing overhead cost drivers.... rdquo; The topic addressed by the work of Banker et al.... (1995), overhead costs, is an important issue for manufacturers....
19 Pages (4750 words) Essay

Critique of a research report

The research paper lacks empirical studies and evidences linking preadmission variables, academic progression, and attrition.... Literature Review The study is new to the field of nursing that is why a 20-year review of literature offered no studies with empirical evidence.... Data analysis utilized the Statistical Package for Social Sciences software and hypotheses were investigated using descriptive statistics and tested using correlational statistics and ...
1 Pages (250 words) Research Paper

Multiple regression model

A regression model will be developed: that will eventually be used to project the level of house prices in the future.... Assumptions of the study Assumptions are vital concept of empirical studies.... Just like any other empirical study, this study applies some statistical assumptions in order to achieve the much needed results.... Name: Course: Professor: Date: Title: MUTIPLE regression MODEL Introduction Just like in a normal market situation, housing market also experience the forces of demand and supply....
7 Pages (1750 words) Essay

Multiple Regressions Empirical Project

To make this a success, secondary data downloadable from http://www.... swego.... du/~kane/econometrics was used.... From the results it was found out that a billion… Further, a billion dollar increase in direct foreign investment holding consumption and net exports constant leads to 0.... 8 billion dollar decrease in A billion dollar increase in net exports holding consumption and direct foreign investments constant leads to 0....
6 Pages (1500 words) Essay

Effects of Cigarette Taxes on the Demand for Cigarettes

Another factor that assists in the demand analysis is If the price of cigarettes increases, not only will the quantity of the cigarettes fall but simultaneously it may also affect other commodities.... The task is to analyze the effect on the demand for cigarettes due to the imposition of taxes....
12 Pages (3000 words) Research Paper

Role of Cortisol and Psychopathy in the Cycle of Violence

The correlation between the variables was tested using multiple regression models.... he findings project that both psychological therapies and psychopharmacological medications are essential to reduce aggression.... The paper "Role of Cortisol and Psychopathy in the Cycle of Violence" focuses on the critical analysis of the few factors, such as child abuse that are tested on aggression and violence, which have separate associations with the behavior “aggression”....
10 Pages (2500 words) Research Paper

Bilateral Trade in the Economies of Various Countries

The general hypothesis is:The gravity equation is considered probably the most applied empirical trade device for more than a decade now.... Nonetheless, with the emergence of new economic theory, advancement in international trade, and globalization, a unique empirical application of the model with respect to a country's GDP and export capability in bilateral trade is required....
8 Pages (2000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us