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Econometrics Assignment Sample Questions and Answers:
Question 1: From the following bivariate frequency distribution, obtain the two regression
equations and estimate the marks in Statistics of a student who secures 40 marks in
Quantitative Techniques. Also, find the coefficient of correlation between the two variables.
X
Y
Marks
in
Q.T. (Y)

Marks in Statistics (X)


20-25
25-30
30-35
Total
16-20
20-24
24-28
Total

9
6
15

14
11
25

3
7
10

23
20
7
50

Solution
According to the table given, marks in statistics are represented by X and marks in Q-T are
represented by Y. Thus, the regression analysis in the given problem will be made as follows
:
Correlation Table (Vide Page 409)
Required factors
(i)Arithmetic average of the X variable :

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Fd x

X=A+

= 27.5 + -5/50 5 = 27
(ii)Arithmetic average of the Y variable :
Fdy

Y=A+

= 22 + -16/50 4 = 20.72
(iii)Regression coefficient of X on Y :
bxy =

N
N

Fd x d y . Fd x . Fd y
Fd y 2 ( Fd y 2 )

50 16(5 16)
50 30(16)2

800 80
1500 256

5
4

5/4

= 0.72

(iv)Regression coefficient of Y on X :
byx =

Fd x d y

Fd x . Fd y

Fd 2 ( Fd x 2 )

50 16(5 16)

50 25 (5)2
800 80
1250 25

4/5

4/5 = 0.47

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(a)Regression Equations
(i) Of X on Y
This is given by
X = X + bxy (Y - Y)
= 27 + 0.72(Y 20.72)
= 27 14.9184 + 0.72Y
= 12.0816 + 0.72Y

X = 12.0816 + 0.72

(ii)of Y on X
This is given by
Y = Y + byx (X - X)
= 20.72 + 0.47 (X 27)
= 20.72 12.69 + 0.47 X
= 8.03 + 0.47 X

Y = 8.03 + 0.47X

Thus, the two regression equations are :


X = 12.0816 + 0.72 T
and

Y = 8.03 + 0.47 X

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(b)Estimation of marks in statistics (X)


When the marks in Q.T. (Y) = 40,
X = 12.0816 + 28.80
= 12.0816 + 28.80
= 30.8816 = 31 approx.

(c)Coefficient of Correlation
Basing upon the regression coefficients we have,
r = . = 0.72 0.47
= 0.3384 or 0.34

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