(Solved): Consumption data for 22 individuals produce the following (where y=log (consumption) and x=log( inc ...
Consumption data for 22 individuals produce the following (where y=log (consumption) and x=log( income )) : y??=20,?t?yt2?=8900,x?=10,?t?(xt??x?)2=60,?t?(xt??x?)(yt??y??)=30? where x?,y?? are the sample means of x and y. 1. Compute the least squares estimates of ?,? in the model: yt?=?+?xt?+ut?. 2. Test the hypothesis that ?=1 (assume that ut? is i.i.d. and normally distributed). 3. Compute the centered R2.