25 Jul HOW WELL DOES THE ESTIMATED LINE VISUALLY APPEAR TO FIT THE DATA?
1.(25 Show more Data is found @ https://drive.google.com/file/d/0B4ZQnqR5m1DPdnBVYlBwODBfMG8/edit?usp=sharing 1.(25 Points) For an EconS 499 project several years ago a former SES student (Scott Moore) collected data for all NFL teams for the time period 2000-2009. This resulted in 310 observations (32 teams with 9-10 years each depending upon the team). He was interested in identifying the factors that explain ticket prices for NFL football games. He decided to start with a simple model and included all teams over all the years. His first model regressed ticket prices on personal income (per capita for the state where the team is located) as follows: Ticketpricei= B1 + B2 Incomei + ui i=1 310 Data for ticketprice (in $) and income (per capita for the state measured in $1000) and several other variables for the 310 observations are in the file ScottNFL_Spring2014.csv in the folder on Angel with this assignment. Assume that the basic assumptions of the classical linear regression model (CLRM) are satisfied. You can use either STATA (preferred) or EXCEL (as long as you can generate the graphs that you need for the assignment). a.Obtain the OLS estimates for this model using the entire dataset (n=310). Using the results from your printout write down the estimated regression line. That is include the estimated slope and intercept coefficients their estimated standard errors the estimated standard error of the regression and the R 2 and adjusted R 2 values. Make sure that it is clear which concept the numbers that you present are referring to. b.Give an interpretation of the estimated equation in terms of the situation (and the numbers) in this problem. Does the (sign) of the estimated slope coefficient make economic sense to you? c.Plot the data and the estimated/fitted regression line. How well does the estimated line visually appear to fit the data? On the basis of the appropriate goodness of fit measures how well does the model fit? d.Test the hypothesis (at the .05 level) that there is a positive relationship between Ticketprice and Income. Write down (using appropriate notation) the hypotheses that you are testing and show the steps of your test. Dont just circle information on your printout and dont just state your conclusion. e.The price-income flexibility is a measure of the percentage change in ticket price (P) in response to a one percent change in income (I) other things held constant. (i.e. For a linear function the flexibility varies as the ratio I/P changes. To compute a flexibility at any point on a linear function the relevant values of the independent variable(s) are inserted into the estimated regression equation and the corresponding value of the dependent variable is computed or forecasted. Then the selected level of I and the computed or predicted value of P are used in the I/P ratio along with the estimated slope to obtain the flexibility. For this problem calculate the flexibility of Ticketprice (P) in response to a one percent change in Income (I) evaluated at each of these three Income Levels (I): 1) average (sample) per capita (in $1000) Income; 2) lowest per capita (in $1000) Income observed (I = 23.57); 3) highest per capita (in $1000) Income observed (I = 50.90). Compare the magnitude and briefly discuss the three flexibility estimates. 2.(15 Points) After you finish the previous problem and reflect on the magnitude of the R 2 you realize that you need to try some more model specifications. For this problem you decide to regress Ticketprice on Income plus 4 additional variables Attendance (in 100000) Population (in 100000) Salary (Median Salary of team in $10000) and Conference Playoffs number). The information for these variables is in the same file as you used in 1. Assume that the basic assumptions of the CLRM are satisfied. a.Obtain the OLS estimates for this model using all 310 observations. Using the results from your printout write down the estimated regression line. That is include the estimated slope and intercept coefficients their estimated standard errors the estimated standard error of the regression and the R 2 and adjusted R 2 values. Make sure that it is clear which concept the numbers that you present are referring to. b.Use the F test to test the overall significance of your model. Write out the null and alternative hypothesis that youre testing report the F statistic the p-value associated with the F statistic and write out the conclusion of your test. c.On the basis of the appropriate goodness of fit measures how well does the model fit? d.Now compare the results from the model estimated in question 1 and the model estimated in the current problem. Compare the overall fit of the models the consistency of the signs of the estimated slope coefficients with prior expectations the statistical significance of the estimated slope coefficients etc. Which one would you prefer to use and why? Note that there is not a single answer to this problem! (20 Points) Now you wonder if you should estimate your model separately for the two conferences in the NFL the AFC and the NFC. The variable Conference included in the dataset indicates which conference the team is in. Using the same model specification as in 2 for the entire data set obtain the OLS estimates for this model for each Conference separately the AFC and the NFC. Using the results from your printout write down the estimated regression line for each conference separately. That is include the estimated slope and intercept coefficients their estimated standard errors the estimated standard error of the regression and the R 2 and adjusted R 2 values. Make sure that it is clear which concept the numbers that you present are referring to. Now compare the results from the two conferences. Specifically address the overall fit of the models the consistency of the signs of the estimated slope coefficients with prior expectations the statistical significance of the estimated slope coefficients etc. Now you need to a statistical test (the General Linear F test) to determine if the data should be pooled (i.e. combined over the two conferences or estimated separately for each conference). State the null and alternative hypothesis that you are testing. Show the steps and results of your test and be sure to state your conclusion correctly (i.e. should you pool the data?) You can use the following table to help guide you to the correct answer. Group (Conference) RSS df Group 1 AFC Group 2 NFC Sum Show less
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.