{br} STUCK with your assignment? {br} When is it due? {br} Get FREE assistance. Page Title: {title}{br} Page URL: {url}
UK: +44 748 007-0908, USA: +1 917 810-5386 [email protected]

Introductory Econometrics
Assignment 1 (10%) Semester 2 2015
The due date for this assignment is 11 September.
You must read these guidelines/rules before proceeding with your assignment.
1. This assignment must be submitted to your tutor’s mailbox on Level5, Building H,
Caulfield Campus by 6:00pm on the above due date.
2. This assignment is worth 10% of the final mark for this unit.
3. Your assignment can be hand-written or typed and must be submitted in hard copy.
Submissions in electronic form or by email are not accepted.
4. Make sure the assignment COVER SHEET is on top of your assignment. You must complete
all sections of the cover sheet, including your tutorial day/time, and your tutor’s name. You
must also sign and date the cover sheet. If your assignment does not have a cover sheet it
will be returned to you unmarked. The cover sheet is available at URL:
http://www.buseco.monash.edu.au/student/forms/assessment-coversheet.doc
You may ask your tutor for any necessary information to complete the cover sheet.
5. This assignment must be no longer than 7 pages in total (including any graphs and tables.)
Any pages in excess of this length will be ignored in the marking process. Also, your work
must be clear and legible. If it cannot be read, or can be read only with difficulty, your
assignment will be returned to you unmarked.
6. ETF2100: The assignment will be marked out of 100 and the mark will be converted to a
mark out of 10 for the purpose of establishing your final mark in this unit.
7. ETF5910: The assignment will be marked out of 120 and the mark will be converted to a
mark out of 10 for the purpose of establishing your final mark in this unit.
8. Use A4 paper and make sure it is securely stapled at the top left corner.
9. You must keep a copy of your assignment. In addition, you must retain a copy of your
marked Assignment 1 until after the publication of the final results.
10. Late assignments, where approval for late submission has not been given, will be penalised
by deducting 25 out of 100 marks for each business day for up to four days, at which time a
mark of zero will be given.
11. If you are experiencing interference with your studies that is outside of your control, you
may be eligible to receive an assignment extension. Applications must be made by
completing the In-Semester Special Consideration Application Form found at the URL
http://www.buseco.monash.edu.au/student/exams/speccon.html
12. You should consult with your tutor before submitting this form to the lecturer. When it is
supported by your tutor, it should then be submitted to Professor Param Silvapule for
approval. Do not copy EViews output into your submission except for appropriate graphs.
Write estimated regression equations as equations, and tabulate other data you wish to
refer to in a reasonably compact form.
13. Your tutor will return assignments in class or during consultation time.

1

The data file includes crime and punishment data in the US for 1981 & 1987. The variable
CRIME is the crimes in the US, and PROARR is the probability of arrest, and it is measured
as the ratio of arrests to offences. The variable PRBCONV is the probability of conviction,
and it is measured as the ratio of conviction to arrests.
Question 1
Use the data crime_data_1987.xls and answer the questions from the US department of
criminology:
(i) Estimate the log-linear regression relating the log of the crime rate to the probability of an
arrest. That is estimate the simple linear regression model:
(1)
LCRIME = ß1 + ß 2 PROARR + e .
where LCRIME = log(crime rate)
Report the estimated regression results in the usual way.

(5 marks)

(ii) Comment on the goodness-of-fit of the model as measured by R2.

(5 marks)

(iii) Test the null hypothesis that there is no relationship between the crime rate and the
probability of arrest against the alternative that there is an inverse relationship between the
two variables. Use the level of significance 1%.
(15 marks)
(iv) If we increase the probability of arrest by 10%, what will be the effect on the crime rate?
(Hint: Compute the marginal effect for this log-linear model & interpret the marginal effect.) (5 marks)

(v) Compute the elasticity at the mean, if necessary. Interpret this quantity.

(5 marks)

(vi) Generate the residual plot. Does this plot indicate any pattern? If so, what can you infer
about the constant variance assumption about the error term?
(5 marks)
(vii) Test whether or not the error term is normally distributed.

(10 marks)

Question 2
An expert in criminology is saying that the crime rate cannot be reduced significantly by
increasing the probability of arrests, but it can be reduced by increasing conviction. Can you
test this claim?
Hint: You can answer the questions below:
(a) Now, use PRBCONV as the explanatory variable in model (1). Repeat the parts (i) to (vii).
(30 marks)
(b) Do you support the expert’s claim? Justify your answer by comparing the relevant results
of the two models.
(10 marks)
(c) Based on your findings, write a (maximum of) ½ page report to the department of
criminology on the relationship between the crime rate & the two variables and how the
department can reduce the crime rate.
(10 marks)
*Question 3 (This question is for ETF 5910 students only)
Use crime_data_1981.xls. Carry out the necessary analysis for the year 1981 & compare the
relationships between the crime rate and the explanatory variables across the two years. Write
a (maximum of) 3/4 page report. No need to conduct detail analysis again.
(20 marks)

Sample Answer

Compelling correspondence is essential to the achievement all things considered but since of the changing idea of the present working environments, successful correspondence turns out to be more troublesome, and because of the numerous impediments that will permit beneficiaries to acknowledge the plan of the sender It is restricted. Misguided judgments.In spite of the fact that correspondence inside the association is rarely completely open, numerous straightforward arrangements can be executed to advance the effect of these hindrances.

Concerning specific contextual analysis, two significant correspondence standards, correspondence channel determination and commotion are self-evident. This course presents the standards of correspondence, the act of general correspondence, and different speculations to all the more likely comprehend the correspondence exchanges experienced in regular daily existence. The standards and practices that you learn in this course give the premise to additionally learning and correspondence.

This course starts with an outline of the correspondence cycle, the method of reasoning and hypothesis. In resulting modules of the course, we will look at explicit use of relational connections in close to home and expert life. These incorporate relational correspondence, bunch correspondence and dynamic, authoritative correspondence in the work environment or relational correspondence. Rule of Business Communication In request to make correspondence viable, it is important to follow a few rules and standards. Seven of them are fundamental and applicable, and these are clear, finished, brief, obliging, right, thought to be, concrete. These standards are frequently called 7C for business correspondence. The subtleties of these correspondence standards are examined underneath: Politeness Principle: When conveying, we should build up a cordial relationship with every individual who sends data to us.

To be inviting and polite is indistinguishable, and politeness requires an insightful and amicable activity against others. Axioms are notable that gracious “pay of graciousness is the main thing to win everything”. Correspondence staff ought to consistently remember this. The accompanying standards may assist with improving courtesy:Preliminary considering correspondence with family All glad families have the mystery of progress. This achievement originates from a strong establishment of closeness and closeness. Indeed, through private correspondence these cozy family connections become all the more intently. Correspondence is the foundation of different affiliations, building solid partners of obedient devotion, improving family way of life, and assisting with accomplishing satisfaction (Gosche, p. 1). In any case, so as to keep up an amicable relationship, a few families experienced tumultuous encounters. Correspondence in the family is an intricate and alluring marvel. Correspondence between families isn’t restricted to single messages between families or verbal correspondence.

It is a unique cycle that oversees force, closeness and limits, cohesiveness and flexibility of route frameworks, and makes pictures, topics, stories, ceremonies, rules, jobs, making implications, making a feeling of family life An intelligent cycle that makes a model. This model has passed ages. Notwithstanding the view as a family and family automatic framework, one of the greatest exploration establishments in between family correspondence centers around a family correspondence model. Family correspondence model (FCP) hypothesis clarifies why families impart in their own specific manner dependent on one another ‘s psychological direction. Early FCP research established in media research is keen on how families handle broad communications data. Family correspondence was perceived as an exceptional scholastic exploration field by the National Communications Association in 1989. Family correspondence researchers were at first impacted by family research, social brain science, and relational hypothesis, before long built up the hypothesis and began research in a family framework zeroed in on a significant job. Until 2001, the primary issue of the Family Communication Research Journal, Family Communication Magazine, was given. Family correspondence is more than the field of correspondence analysts in the family. Examination on family correspondence is normally done by individuals in brain science, humanism, and family research, to give some examples models. However, as the popular family correspondence researcher Leslie Baxter stated, it is the focal point of this intelligent semantic creation measure making the grant of family correspondence special. In the field of in-home correspondence, correspondence is normally not founded on autonomous messages from one sender to one beneficiary, yet dependent on the dynamic interdependency of data shared among families It is conceptualized. The focal point of this methodology is on the shared trait of semantic development inside family frameworks. As such, producing doesn’t happen in vacuum, however it happens in a wide scope of ages and social exchange.

Standards are rules end up being followed when performing work to agree to a given objective. Hierarchical achievement relies significantly upon compelling correspondence. So as to successfully impart, it is important to follow a few standards and rules. Coming up next are rules to guarantee powerful correspondence: clearness: lucidity of data is a significant guideline of correspondence. For beneficiaries to know the message plainly, the messages ought to be sorted out in a basic language. To guarantee that beneficiaries can without much of a stretch comprehend the importance of the message, the sender needs to impart unmistakably and unhesitatingly so the beneficiary can plainly and unquestionably comprehend the data.>

Our customer support team is here to answer your questions. Ask us anything!