MODELLING AND FORECASTING CONSUMERS’ EXPENDITURE
This assignment gives you a chance to apply the econometric theory you have Econometrics to the challenging task of modelling and forecasting consumers’ expenditure.
Using Stata and the data file Cons 1976-2019.xlsx, estimate the following initial model for the subperiod 1976–2016:
Ct = α + β1Yt + β2Ht + β3Ct-1 + εt (1)
where Ct is households’ real final consumption expenditure (£ million) in year t
Yt is households’ real disposable income (£ million) in year t
Ht is the Nationwide real house price index in quarter 2 of year t (£ per house, 2019Q2 prices)
εt is a random error term with an expected value of zero in year t
Using your log, paste in your initial results from Stata, along with a correlation matrix and summary table with means, standard deviations.
Offer a brief rationale for the inclusion of the explanatory variables in model (1). Comment on your findings, referring particularly to the signs, values and statistical significance of the estimated coefficients. Be sure to explain how to interpret the values of the regression coefficients. How satisfactory is your initial model? You should play close attention to any problems of serial correlation, multicollinearity and heteroscedasticity, as well as to possible specification errors. Illustrate your answer with appropriate graphic output from Stata.
Now consider how you might refine your initial model. You should present the results for four models in a summary table (including your initial one in the first column) and explain how and why you refined your initial model. You should follow the ‘general-to-specific’ (g-to-s) modelling methodology. You can use the Cons 1976-2019.xlsx data file as a source of data on additional variables. For consistency, all models must be fitted to data for 1976–2016. In your summary table, show standard errors in brackets beneath the regression coefficients, followed by t ratios in bold type and then p values. For each model, report R2,
, D.W. and χ2 test statistics for serial correlation and heteroscedasticity (along with p values).
Using your preferred model, forecast consumers’ expenditure from 2017 to 2019. How accurate are the forecasts? Provide a plot of actual and fitted values of Ct. Try to account for any discrepancies between observed and forecasted expenditure.
Outline what improvements you think could be made to your preferred model if you had more time to devote to the modelling of consumers’ expenditure in the UK.
Help Me Write My Essay - Reasons:
Best Online Essay Writing Service
We strive to give our customers the best online essay writing experience. We Make sure essays are submitted on time and all the instructions are followed.
Our Writers are Experienced and Professional
Our essay writing service is founded on professional writers who are on stand by to help you any time.
Free Revision Fo all Essays
Sometimes you may require our writers to add on a point to make your essay as customised as possible, we will give you unlimited times to do this. And we will do it for free.
We understand the frustrations that comes with late essays and our writers are extra careful to not violate this term. Our support team is always engauging our writers to help you have your essay ahead of time.
Customised Essays &100% Confidential
Our Online writing Service has zero torelance for plagiarised papers. We have plagiarism checking tool that generate plagiarism reports just to make sure you are satisfied.
24/7 Customer Support
Our agents are ready to help you around the clock. Please feel free to reach out and enquire about anything.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
HOW OUR ONLINE ESSAY WRITING SERVICE WORKS
Let us write that nagging essay.
By clicking on the "PLACE ORDER" button, tell us your requires. Be precise for an accurate customised essay. You may also upload any reading materials where applicable.
Pick A & Writer
Our ordering form will provide you with a list of writers and their feedbacks. At step 2, its time select a writer. Our online agents are on stand by to help you just in case.
Editing (OUR PART)
At this stage, our editor will go through your essay and make sure your writer did meet all the instructions.
Receive your Paper
After Editing, your paper will be sent to you via email.