QAB105 - Quantitative Analysis for Business Assignment

Assignment Task

Assume that you are a research analyst in a business firm. Your team leader has given you a research task to investigate whether fossil fuel consumption affects CO₂ emissions.

For this purpose, suppose that you have collected sample data on fossil fuel consumption (as a % of total fuel consumption) and CO₂ emissions (in kilo tonnes) in China between 1990-2014 from the World Bank Open Data. The data are stored in QAB105 sheet in Assignment Using this data set and EXCEL, and no more than in total (including Q5) answer the following questions.

1. Using appropriate graphical descriptive techniques (in Excel):

• Describe the trend of two data series, fossil fuel consumption and CO₂
• Analyse the relationship between the two variables, fossil fuel consumption and CO₂ emissions. 

2. Using appropriate numerical descriptive methods (in Excel):

• Summarize the above two data series, fossil fuel consumption and CO₂ emissions.
• Comment on the strength and the direction of the relationship between fossil fuel consumption and CO₂ emissions.                         

3. Using the Simple Linear Regression technique,

• Develop a model to explain the relationship between fossil fuel consumption and CO₂ emissions. Explain the reason for your choice of the dependent and independent variables of your model.
• Estimate the model you proposed in 3(a) using Excel and display the output.
• Interpret the estimated coefficients you obtained in 3(b).

4. Applying appropriate statistical techniques,

• Test whether the linear relationship between fossil fuel consumption and CO₂ emissions you estimated in Q3 is significant (use a = 0.05). (Hint: display 6 steps process in relation to this test).
• Assess the fitness of the estimated model you have estimated in Q3.                        
• Based on all your answers above, write a summary report about your findings to hand over to your team leader.

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