These problems are directly related with Lab Set 4 done in the class, multivariable regression and hypotheses testing. Go over the Lab 4 Sample Solutions file posted recently. Show your regression results on the same page as the data for each of the questions. Answer the questions on a separate document file. Make sure your numbers and sub-numbers are clearly seen. Turn in the files by 11:59 pm on Sunday, November 28. Question 1: The attached are the quarterly data for lamb meat consumption in the United States from 1980 to 1995. Also included are quarterly data for lamb price, beef price, pork price, chicken price and per capita income. a. Create four seasonal dummy variables to examine seasonality and drop one of the dummies while estimating regression equation. (2 points) b. Estimate the regression equation with lamb consumption as a dependent variable and the rest as explanatory variables including three seasonal dummies. (3 points) C Are beef, pork, chicken substitutes to lamb or compliments? How can you tell? (1 point) d. What is the value of R?? Comment on the value. (1 point) e. Set up a global null and alternative hypothesis and conduct the test using an appropriate statistic. (1 point) f. Conduct individual hypothesis test. Set the null and alternative hypothesis for each of the variables. Use appropriate test statistics. (3 points) 8. Identify the variable for which you fail to reject null hypothesis. (1 point) h. Calculate own price elasticity of lamb meat. Use mean values of lamb quantity consumed and lamb price. (2 point) Otrs Pork Price Subs 1.34 1.25 Boet Pro S/Lbs 2.31 2.27 2.38 2.36 62.75 2.33 2.31 2.39 2.35 2.33 61.25 1:45 1.57 co 1.6 1.69 1.85 1.87 1.07 1.03 1.04 1.03 1.04 1.01 1.02 2.38 1980-1 1980-2 1980-3 1980-4 1981-1 1981-2 1981-3 1981-4 1982-1 1982-2 1982-3 1982-4 1983-1 1983-2 1983-3 1983-4 1984-1 1984-2 1984-3 1984-4 1985-1 1985-2 1985-3 1985-4 1986-1 1986-2 1986-3 1986-4 1987-1 1987-2 1987-3 1987-4 1988-1 1988-2 1988-3 1988-4 1989-1 1989-2 1989-3 1989-4 1990-1 1990-2 1990-3 1990-4 1991-1 Lamb Meat Lamb Meat Consumption Price/cwt (5) (Million lbs) 80 75.63 77 65.48 72 65.85 81 69.25 84 77 61.64 79 54.19 88 50.63 90 56.68 85 2.43 88 49.05 2.44 93 48.59 2.33 93 64.52 2.34 89 57.89 2.41 94 43.65 2.34 91 55.83 2.27 98 63.62 2.38 92 58.62 88 57.04 2 32 93 68.39 2.33 93 75.10 2.35 83 74.07 2.3 85 74.89 2.23 91 84.75 2.26 90 75.74 2.29 78 82.96 2.23 81 81.30 2.26 82 84.96 2.29 76 101.29 2.31 75 105.53 2.39 77 99.77 2.42 81 102.44 2.42 85 112.52 2.42 80 89.56 2.5 80 79.09 2.54 84 82.40 2.55 88 88.19 2.61 80 80.73 2.67 81 75.21 2.68 92 75.25 2.67 93 76.72 2.73 89 64.02 2.81 84 55.93 2.8 92 57.63 2.9 99 52.98 2.94 1.13 Chicken Per Capita Price Income S/Lbs S/Person 092 8437 0.89 8458 1.02 1.54 8710 1.05 9052 1.49 1.05 9314 1.01 9405 9711 1.59 9830 9877 10082 10177 10294 1.83 10398 1.71 1.02 10614 1.65 1.08 10873 1.6 1.09 11169 1.61 1.24 11521 1.59 1.21 11805 1.64 1.18 12067 1.63 1.14 12153 1.65 1.16 12270 1.59 12607 1.61 1.14 12621 1.63 1.17 12845 1.68 1.17 13089 1.64 1.18 13191 1.89 1.39 13325 1.93 1.37 13369 1.85 1.29 13635 1.83 1.23 13601 1.96 1.22 13912 1.9 1.21 14245 1.84 1.19 14535 1.85 1.27 14713 1.86 1.48 14978 1.79 1.43 15199 1.8 1.42 15533 1.79 1.52 15655 1.84 1.51 15794 1.89 1.42 15985 1.96 1.44 16369 2.08 1.47 16602 2.23 1.49 16810 2.23 1.43 16896 2.15 1.44 16941 ISIR 84 83 92 91 85 82 85 82 88 1991-2 1991-3 1991-4 1992-1 1992-2 1992-3 1992-4 1993-1 1993-2 1993-3 1993-4 1994-1 1994-2 1994-3 1994-4 1995-1 1995-2 1995-3 1995-4 80 54.52 52.61 53.07 66.20 66.18 55.18 61.29 77.94 64.58 63.50 71.26 71.78 64.16 69.59 73.25 79.45 82.13 80.77 81.98 2.95 2.85 2.79 2.82 2.87 2.83 2.87 2.92 3.00 2.92 2.89 2.87 2.86 2.80 2.79 2.84 2.83 2.85 2.85 2.13 2.15 2.05 1.99 1.96 2.00 1.97 1.95 1.94 2.00 2.01 2.01 1.98 1.99 1.94 1.92 1.90 1.96 2.02 1.44 1.45 1.41 1.39 1.38 1.43 1.43 1.43 1.44 1.43 1.47 1.46 1.47 1.46 1.41 1.42 1.43 1.44 1.47 17161 17253 17405 17753 17979 18036 18478 18225 18513 18589 18892 18699 19200 19452 19700 19965 20068 20306 20555 79 86 79 66 73 78 72 63 68 ____ These problems are directly related with Lab Set 4 done in the class, multivariable regression and hypotheses testing. Go over the Lab 4 Sample Solutions file posted recently. Show your regression results on the same page as the data for each of the questions. Answer the questions on a separate document file. Make sure your numbers and sub-numbers are clearly seen. Turn in the files by 11:59 pm on Sunday, November 28. Question 1: The attached are the quarterly data for lamb meat consumption in the United States from 1980 to 1995. Also included are quarterly data for lamb price, beef price, pork price, chicken price and per capita income. a. Create four seasonal dummy variables to examine seasonality and drop one of the dummies while estimating regression equation. (2 points) b. Estimate the regression equation with lamb consumption as a dependent variable and the rest as explanatory variables including three seasonal dummies. (3 points) C Are beef, pork, chicken substitutes to lamb or compliments? How can you tell? (1 point) d. What is the value of R?? Comment on the value. (1 point) e. Set up a global null and alternative hypothesis and conduct the test using an appropriate statistic. (1 point) f. Conduct individual hypothesis test. Set the null and alternative hypothesis for each of the variables. Use appropriate test statistics. (3 points) 8. Identify the variable for which you fail to reject null hypothesis. (1 point) h. Calculate own price elasticity of lamb meat. Use mean values of lamb quantity consumed and lamb price. (2 point) Otrs Pork Price Subs 1.34 1.25 Boet Pro S/Lbs 2.31 2.27 2.38 2.36 62.75 2.33 2.31 2.39 2.35 2.33 61.25 1:45 1.57 co 1.6 1.69 1.85 1.87 1.07 1.03 1.04 1.03 1.04 1.01 1.02 2.38 1980-1 1980-2 1980-3 1980-4 1981-1 1981-2 1981-3 1981-4 1982-1 1982-2 1982-3 1982-4 1983-1 1983-2 1983-3 1983-4 1984-1 1984-2 1984-3 1984-4 1985-1 1985-2 1985-3 1985-4 1986-1 1986-2 1986-3 1986-4 1987-1 1987-2 1987-3 1987-4 1988-1 1988-2 1988-3 1988-4 1989-1 1989-2 1989-3 1989-4 1990-1 1990-2 1990-3 1990-4 1991-1 Lamb Meat Lamb Meat Consumption Price/cwt (5) (Million lbs) 80 75.63 77 65.48 72 65.85 81 69.25 84 77 61.64 79 54.19 88 50.63 90 56.68 85 2.43 88 49.05 2.44 93 48.59 2.33 93 64.52 2.34 89 57.89 2.41 94 43.65 2.34 91 55.83 2.27 98 63.62 2.38 92 58.62 88 57.04 2 32 93 68.39 2.33 93 75.10 2.35 83 74.07 2.3 85 74.89 2.23 91 84.75 2.26 90 75.74 2.29 78 82.96 2.23 81 81.30 2.26 82 84.96 2.29 76 101.29 2.31 75 105.53 2.39 77 99.77 2.42 81 102.44 2.42 85 112.52 2.42 80 89.56 2.5 80 79.09 2.54 84 82.40 2.55 88 88.19 2.61 80 80.73 2.67 81 75.21 2.68 92 75.25 2.67 93 76.72 2.73 89 64.02 2.81 84 55.93 2.8 92 57.63 2.9 99 52.98 2.94 1.13 Chicken Per Capita Price Income S/Lbs S/Person 092 8437 0.89 8458 1.02 1.54 8710 1.05 9052 1.49 1.05 9314 1.01 9405 9711 1.59 9830 9877 10082 10177 10294 1.83 10398 1.71 1.02 10614 1.65 1.08 10873 1.6 1.09 11169 1.61 1.24 11521 1.59 1.21 11805 1.64 1.18 12067 1.63 1.14 12153 1.65 1.16 12270 1.59 12607 1.61 1.14 12621 1.63 1.17 12845 1.68 1.17 13089 1.64 1.18 13191 1.89 1.39 13325 1.93 1.37 13369 1.85 1.29 13635 1.83 1.23 13601 1.96 1.22 13912 1.9 1.21 14245 1.84 1.19 14535 1.85 1.27 14713 1.86 1.48 14978 1.79 1.43 15199 1.8 1.42 15533 1.79 1.52 15655 1.84 1.51 15794 1.89 1.42 15985 1.96 1.44 16369 2.08 1.47 16602 2.23 1.49 16810 2.23 1.43 16896 2.15 1.44 16941 ISIR 84 83 92 91 85 82 85 82 88 1991-2 1991-3 1991-4 1992-1 1992-2 1992-3 1992-4 1993-1 1993-2 1993-3 1993-4 1994-1 1994-2 1994-3 1994-4 1995-1 1995-2 1995-3 1995-4 80 54.52 52.61 53.07 66.20 66.18 55.18 61.29 77.94 64.58 63.50 71.26 71.78 64.16 69.59 73.25 79.45 82.13 80.77 81.98 2.95 2.85 2.79 2.82 2.87 2.83 2.87 2.92 3.00 2.92 2.89 2.87 2.86 2.80 2.79 2.84 2.83 2.85 2.85 2.13 2.15 2.05 1.99 1.96 2.00 1.97 1.95 1.94 2.00 2.01 2.01 1.98 1.99 1.94 1.92 1.90 1.96 2.02 1.44 1.45 1.41 1.39 1.38 1.43 1.43 1.43 1.44 1.43 1.47 1.46 1.47 1.46 1.41 1.42 1.43 1.44 1.47 17161 17253 17405 17753 17979 18036 18478 18225 18513 18589 18892 18699 19200 19452 19700 19965 20068 20306 20555 79 86 79 66 73 78 72 63 68 ____