2:06 pm Wed 10 Nov 90 vuws.westernsydney.edu.au Remaining Time: 3 hours, 13 minutes, 27 seconds. Question Completion Status: . estat hettest, rhs Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: arable nitrokg chi2 (2) 6.17 Prob > chi2 0. 0456 estat imtest, white White's test for Ho: homoskedasticity against Ha: unrestricted heteroskedasticity chi2 (5) 8.25 Prob > chi2 = 0. 1428 Cameron & Trivedi's decomposition of IM-test Source chi2 df P Heteroskedasticity 8. 25 0. 1428 Skewness 4. 94 HNU 0. 0846 Kurtosis 0. 99 0. 3190 Total 14.19 8 0. 0770 estat dwatson Durbin-Watson d-statistic( 3, 24) = . 9098692 Questions: a. Explain to your friend the estimated coefficients and how the independent variables affect the total crop output. (2 marks) b. List the assumptions that have been violated by this model. (3 marks) c. For each assumption violated, write a short explanation to your friend on how it will affect the validity of the results. (2 marks) d. Write the actions that your friend should take to deal with the assumptions violated, and how this would help improve the analysis. (3 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph Open Sans,s... 10pt V EVEVALI ...2:06 pm Wed 10 Nov 90% vuws.westernsydney.edu.au Remaining Time: 3 hours, 13 minutes, 34 seconds. Question Completion Status: A friend of yours has asked for your help. Your friend obtained a data set that has the total output of all crops in Canada from 1994 to 2014. He estimated a model that linked the crop output to the size of land used for agriculture and the amount of fertilizer. The model is specified below. He needs your help to interpret the results. crop, = Bot Barable, + Bynitrokg, + u. Variable definition crop - total crop output in tonnes (crop) for year t arable - total hectares of land used for year t nitrokg - total nitrogenous fertiliser used for year t The STATA output is the following. regress crop arable nitroke if coded_country ==2 Source SS df MS Number of obs 24 F (2, 21) 13.09 Model 454408055 227204028 Prob > F 0. 0002 11 11 11 11 11 11 Residual 364443955 21 17354474 R-squared 0 . 5549 Adj R-squared 0 . 5125 Total | 818852010 23 35602261.3 Root MSE 4165.9 crop Coef. Std. Err. P>Itl [95% Conf. Interval] arable -4. 430863 . 8661393 -5. 12 0. 000 -6. 232098 -2. 629628 nitrokg -467. 6487 161 . 1132 -2.90 0. 009 -802 . 702 -132.5953 cons 228225.8 37207.55 6.13 0 . 000 150848.5 305603. 1 estat vif Variable VIF 1 /VIF arable 1. 43 0. 699694 nitrokg 1. 43 0 . 699694 Mean VIF 1. 43 estat ovtest Ramsey RESET test using powers of the fitted values of crop model has no omitted variables F (3, 18) = 1 . 05 Prob > F 0. 3948