Solution Manual for Using Econometrics: A Practical Guide, 7th Edition
Struggling with problems? Solution Manual for Using Econometrics: A Practical Guide, 7th Edition provides clear, detailed solutions for better learning.
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Instructor’s Manual
Answers to Odd-numbered Exercises
Chapter 1
1-3. (a) The coefficient of Li represents the change in the percentage chance of making a putt when
the length of the putt increases by one foot. In this case, the percentage chance of making the
putt decreases by 4.1 for each foot longer the putt is.
(b) The equations are identical. To convert one to the other, note thatˆP i = Pi – ei, which is true
because ei = Pi -ˆP i (or more generally, ei = Yi –ˆYi ).
(c) 42.6 percent, yes; 79.5 percent, no (too
Answers to Odd-numbered Exercises
Chapter 1
1-3. (a) The coefficient of Li represents the change in the percentage chance of making a putt when
the length of the putt increases by one foot. In this case, the percentage chance of making the
putt decreases by 4.1 for each foot longer the putt is.
(b) The equations are identical. To convert one to the other, note thatˆP i = Pi – ei, which is true
because ei = Pi -ˆP i (or more generally, ei = Yi –ˆYi ).
(c) 42.6 percent, yes; 79.5 percent, no (too
2 Studenmund • Using Econometrics, Seventh Edition
Chapter 2
2-3. (a) The squares are “least” in the sense that they are being minimized.
(b) If R2 = 0, then RSS = TSS, and ESS = 0. If R2 is calculated as ESS/TSS, then it cannot be
negative. If R2 is calculated as 1 – RSS/TSS, however, then it can be negative if RSS > TSS,
which can happen ifˆY is a worse predictor of Y thanY (possible only with a non-OLS
estimator or if the constant term is omitted).
(c) positive.
(d) We prefer Model T because it has estimated signs that meet expectations and also because it
includes an important variable that Model A omits. A higher R2 does not automatically
Chapter 2
2-3. (a) The squares are “least” in the sense that they are being minimized.
(b) If R2 = 0, then RSS = TSS, and ESS = 0. If R2 is calculated as ESS/TSS, then it cannot be
negative. If R2 is calculated as 1 – RSS/TSS, however, then it can be negative if RSS > TSS,
which can happen ifˆY is a worse predictor of Y thanY (possible only with a non-OLS
estimator or if the constant term is omitted).
(c) positive.
(d) We prefer Model T because it has estimated signs that meet expectations and also because it
includes an important variable that Model A omits. A higher R2 does not automatically
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