Problem Set #1 for Applied Microeconometrics (Prof. Xiaohua Yu) 27 Apr. 2015 Please use the cross-sectional data in the stud.IP to study the consumption behavior of Alcohol and Tobacco. 1. Regress consumption of Alcohol (log ydrink) on grain price (log grain), alcohol price (log drink), tobacco price (log toba), and income (log income). 2. Regress consumption of tobacco (log ytoba) on grain price (log grain), alcohol price (log drink), tobacco price (log toba), and income (log income). 3. Use Ramsay reset to check if the model is specified correctly or not. That is, check if high-order regressors are necessary in regression (First-order term should be always kept in the regression). 4. To see if the assumption of “Full Rank ” is satisfied or not in Question #1 and #2. 5. Give some brief discussion for the estimation results for the best model. Notes: 1. Please send the assignments back to me via Email (Email: [email protected]) before 12:00 on May 5. 2. Include a log file ,and 1 -2 pages of discussion as attached file Reference : Yu X. and D. Abler (2010): Interactions between Cigarette and Alcohol Consumption in Rural China, European Journal of Health Economics. Vol. (11):151-160.
Problem Set #1 for Applied Microeconometrics (Prof. Xiaohua Yu)
27 Apr. 2015Please use the cross-sectional data in the stud.IP to
study the consumption behavior of Alcohol and Tobacco.1. Regress
consumption of Alcohol (log ydrink) on grain price (log grain),
alcohol price (log drink), tobacco price (log toba), and income
(log income).2. Regress consumption of tobacco (log ytoba) on grain
price (log grain), alcohol price (log drink), tobacco price (log
toba), and income (log income).3. Use Ramsay reset to check if the
model is specified correctly or not. That is, check if high-order
regressors are necessary in regression (First-order term should be
always kept in the regression).4. To see if the assumption of Full
Rank is satisfied or not in Question #1 and #2. 5. Give some brief
discussion for the estimation results for the best model.
Notes: 1. Please send the assignments back to me via Email
(Email: [email protected]) before 12:00 on May 5. 2. Include a log file
,and 1 -2 pages of discussion as attached file
Reference :Yu X. and D. Abler (2010):Interactions between
Cigarette and Alcohol Consumption in Rural China, European Journal
of Health Economics. Vol. (11):151-160.
