Economics 301 Regresion Analysis

The study was based on the correlation of unemployment and crime. Needs to utilize an excel document in this analysis.

Submit the results of your regression analysis for the demand function you are estimating for your term project.  Include:

• The data used to estimate the demand model

• The results of the analysis, an analysis of the results

• Description of remaining issue that needs to be addressed before the final paper is submitted.

Using your inventory of data collected, you will estimate and perform various analyses which will lead you to an evaluation.  At the conclusion of your analysis you will address how this example can inform other real-world decision making in other organizations as well as your own decision-making and management skills.   

Statistical Analysis and Tests

1.            Evaluate Adj R².

2.            Each variable (independent variables have to be tested by using t-test, so as to see whether each of the variables (exogenous or independent) that you have include in the function has an effect on the dependent variable (left hand side).

3.            For t-test, the following steps should be followed:

                (i) H₀: β₀ = 0

                (Null hypothesis)

                H_A: β₀ ¹ 0

                (Alternate hypothesis)

If t calculated     > t table value (n-k) degrees of freedom

where:

n = # of observations

                                k = # of parameters, i.e. # of right hand side variables plus the constant

then H₀ is rejected, i.e. the variable you are testing has an effect on the dependent variable.

4.            Do F-test, by following these steps:

                (i) H₀: β₀ = β₁ = β₂ = 0

                (Null hypothesis)

                H_A: At least one β is not equal to zero

                (Alternate hypothesis)

(ii) If F calculated > F table value

Then H₀ is rejected, i.e. all the right-hand-side variables are important.