Problem 3.17

The following table gives data on quit rate per 100 employees in manufacturing and the unemployment rate in manufacturing in the United States for the period 1960-1972.

Download:  0317.dat ,  0317.xls
 

Year 
Quit rate per 100 employees, Y 
Unemployment rate (%), X 
1960
1.3
6.2
1961
1.2
7.8
1962
1.4
5.8
1963
1.4
5.7
1964
1.5
5
1965
1.9
4
1966
2.6
3.2
1967
2.3
3.6
1968
2.5
3.3
1969
2.7
3.3
1970
2.1
5.6
1971
1.8
6.8
1972
2.2
5.6

(a).  Plot the data in a scatter gram ( Eviews)

(b).  Assume that quit rate Y is linearly related to the unemployment rate X as
        Yi=£]1+£]2Xi+ui.  Estimate£]1, £]2, and their standard errors. (Eviews) (Rats)

(c).  Compute r2 and r (Suggested Answer)

(d).  Interprete your result (Suggested Answer)

(e).  Plot the residuals.What can you learn from these residuals? (Eviews)

(f).  How to rationalize the difference? (Suggested Answer)
 
 

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