Tutorial 1: SJ30103 Econometrics

1) Consider the relationship between number of working hours and sales (unit RM1000) below;

Total working hours Sales (RM1000)

20 114
196 921
115 560
50 245
122 575
100 475
33 138
154 727
80 375
147 670
182 828
160 762

(a) Draw a scatter plot using Excel. Add a straight line to the observed pairs and the corresponding regression
equation.
(b) Formulate a linear regression model of the observed data. How many parameters are there in the model?
Write the corresponding design matrix.
(c) Solve a simple linear regression model using matrix approach, = (X T X)1 X T Y .
(d) Use the regression tools in Excel to estimate the parameters of the fitted regression model. Write your
ANOVA table.
(e) Use Excel to compute a 90% confidence interval of the slope of the regression line. Explain how this
confidence interval can be interpreted.
(f) Interpret your fitted model.

2) Repeat question 1(a) - 1(f)for the following data.

Expenditure Income
2400 41200
2650 50100
2350 52000
4950 66000
3100 44500
2500 37700
5106 73500
3100 37500
2900 56700
1750 35600
1450 37500
2020 36900
3750 48200