A graduate student at the University of Jamaica is conducting a work on the labo
ID: 3220159 • Letter: A
Question
A graduate student at the University of Jamaica is conducting a work on the labour the market for a Caribbean state. She amassed data on consumer price indices, and unemployment rates. She used wage growth as her dependent variable and, inflation (percent change in cpi) and unemployment rates as her independent or predictor variables. Using OLS she generated the following table below:
Model 6: OLS, using observations 1969-2005 (N=37)
Dependent variable: wggr
Coefficient Std. Error t-ratio p-value
Constant 3.28323 1.0346 3.1734 0.00319 ***
Inflation 0.451285 0.080067 5.6363 <0.00001 ***
Unemployment -0.126843 0.169465 -0.7485 0.45931
Mean dependent var 4.605405 S.Ddependent var 1.976381
Sum squared resid 72.21495 S.E of regression 1.457384
R-squared 0.486449 Adjusted R-Squared 0.456240
F(2, 34) 16.10286 P-value(F) 0.000012
Log-liklihood -64.87222 Akaike criterion 135.7444
Schwartz criterion 140.5772 Hannan-Quinn 137.4482
Rho 0.388772 Durbin-Watson 1.162512
(a) Write down the general linear form of the function used to forecast wage growth.
(b) What is the OLS Regression Model estimate?
(c) Is the Model statistically significant? Prove your answer.
(d) Conduct individual t-tests to determine which independent variables have significant explanatory power.
(e) How is the correlation matrix used in the analysis of the regression model?
(f) Is there evidence of serial correlation in the model?