21 May WHAT DOES YOUR REGRESSION TELL YOU ABOUT THE DEMAND IN THE INDUSTRY?
Data Description – Give a brief discussion of the data and how/where they were
collected. At the minimum, you should note the time range of the data, scales of the
data (i.e., data in millions of dollars or thousands of tons, etc.), and any notable
events that may be applicable to your data set (such as change in corporate
ownership or natural disasters, etc.). Also, you should describe the institutional
setting of your data. E.g., you should discuss the business with an eye towards how
some unique industry practices might have an impact on the specific data that you
had collected. Also include a table of basic descriptive statistics for your data. Your
description of the data would surely be aided by carefully drawn charts of your data.
c. Regression Model and Results – Carefully develop your regression model. You must
support your model with a “story” of why the right hand side variables you include
are important and/or with the support of the relevant economic theory (including
your hypotheses). Report your regression results in an equation form (see the
textbook for how this is done) or a table form. Be sure to report all relevant
statistics: coefficient estimates, standard error, R2, various test statistics, etc.
d. Discussion and Diagnostic Tests – Carry out all appropriate “goodness of fit” tests and
briefly discuss the “fit” of your regression equation. Which form is the preferred:
linear or log-linear? Explain your conclusion. Finally, carefully describe what your
empirical results are telling you about your hypothesized economic relationship that
you had outlined in part a.
e. Conclusion – What does your regression tell you about the demand in the industry? What
more can be done in the future?
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