presidential Election Data (1916-1996): the data in table 5.19 were kindly provided by professor Ray Fair of Yale university, who has found that the proportion of votes obtained by a presidential candidate i a U.S.A presidential election can be predicted accurately by three macroeconomic variables incumbency and a variable which indicates whether the election was held during or just after a war.

Lil Pteaideatiai Eleetien Data {191619915}: The data in Table 5.19 1were ltii'ajur pmvitled by Pt'al'eaatit' Ray Fair Dl' Yale University whn has funnel that the pmpertian nf antes attained by a presidential candidate in a USA. presiden- tial eieetian ean he predieteci ataeuratelj.r by three maerneennarnie variables, inenmbeney. and a 1itatiahde which indicates whether the eleetinn waa held dating at just after a ware The variables ennaideretl are given in Table 5.20. All gmwth rates are annual rates in pereentage paints. Cnnaider tting the fnilnwihg initial Handel t0 the data: It" = n+lf+a+t53W+4lJj +a5P+ N+e {5.11} (a) Write the tegreeeinn nmdel enneapandiag tn eaeh at the three Feasible 1It-tal'nea {If D in (5.1 l} and interpret the regression meieient if D {133}. (I1) De we need ta keep the T.rariahie I in the above mndel?