Write a summary based on the overall display of econometric knowledge and correctness of the econometric analysis within this exercise.
Review the topic and the variables given. Complete the following 8 steps.
1. What is the hypothetical model you first want to test?
2. Before reviewing the Regression results, what are the expected signs and significance of each independent
variable that you hypothesize to be true?
3. Define irrelevant variables. Which independent variable is a probable irrelevant variable, which is a
possible irrelevant variable?
4. Which variable is weak?
5. Define redundant variable. Which independent variable is a possible redundant variable?
6. What are the possible omitted variables?
7. Which of the Regression Runs Results do you choose as your final specification and why?
8. Use the data table provided to replicate the results of the final specification you chose (use gretl).
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