STA3201- Introduction To Econometrics - KCA University

Assignment Task

a) The ANOVA table below is the result of a study of output against labour and capital input assuming the Cobb-Douglas production function Y = B0 L^B1 K^B2 e¹² , where Y  is the output,  L is the labour input in hours, and K is the capital input in KshM. For the model ln Y =ln B0 + B1 ln L + B2 ln K + U

(i) Obtain the coefficient of multiple determination                  

(ii) What conclusion would you make from the table?

b) A survey was conducted to study the relationship between expenditure on advertising (X) and sales of a particular firm (Y). The following calculations were made;

∑Y_^j2 =299.8 , ∑X_^j2 Y_^j2 =32,308.59 , ∑Y_^j2 =6430.06 n=15

The fitted line is given by

1. Compute the Total Sum of Squares (TSS), Sum of Squared Errors (SSE) hence R-Squared (R²).                                                                    

2. Interpret R² obtained above.      

This Mathematics has been solved by our PhD Experts at My Uni Paper.