UNIVERSITY OF GUJRAT

Semester Spring 2020 – Final Term Examination (Online)

Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Question No 1
Fit the “pooled” model using health outcome (COMP) as a dependent variable and
education (EDUC), health expenditure (HLTHEXP) as independent variables.
. regress comp educ hlthexp

Source SS df MS Number of obs = 700

F( 2, 697) = 701.19
Model 71541.1976 2 35770.5988 Prob > F = 0.0000
Residual 35556.853 697 51.0141362 R-squared = 0.6680
Adj R-squared = 0.6670
Total 107098.051 699 153.216095 Root MSE = 7.1424

comp Coef. Std. Err. t P>|t| [95% Conf. Interval]

educ 2.449954 .1221197 20.06 0.000 2.210187 2.68972

hlthexp .0071716 .0005224 13.73 0.000 .0061459 .0081973
_cons 55.9177 .6838157 81.77 0.000 54.57512 57.26029

Question No 2
Report your results.
No you see that the f value is 701.19 and it is significant and the R-square value is 0.6680 and it
is fit model. On the other table you see that if education level increase the health outcome
increase and it is according to theory the value is 2.449954 and it is significant. On the other
hand if health expenditure increase the health outcome decease and it is against the theory
-0071716 but it is significant.

Question No 3
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Using the Panel data analysis approach, determine which model, fixed or random effects is
preferred.
Fixed Effect:
. xtreg comp educ hlthexp, fe

Fixed-effects (within) regression Number of obs = 700

Group variable: id Number of groups = 140

R-sq: within = 0.0193 Obs per group: min = 5

between = 0.6927 avg = 5.0
overall = 0.6518 max = 5

F(2,558) = 5.50
corr(u_i, Xb) = 0.1452 Prob > F = 0.0043

comp Coef. Std. Err. t P>|t| [95% Conf. Interval]

educ 2.693282 1.157575 2.33 0.020 .4195439 4.96702

hlthexp .0037855 .0026195 1.45 0.149 -.0013598 .0089308
_cons 56.06792 6.723484 8.34 0.000 42.86149 69.27435

sigma_u 6.7413141
sigma_e 3.3804231
rho .79907258 (fraction of variance due to u_i)

F test that all u_i=0: F(139, 558) = 18.37 Prob > F = 0.0000

In this total observation is 700 and the value is 0.0042.

 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Random effect:
. xtreg comp educ hlthexp, re

Random-effects GLS regression Number of obs = 700

Group variable: id Number of groups = 140

R-sq: within = 0.0184 Obs per group: min = 5

between = 0.7098 avg = 5.0
overall = 0.6677 max = 5

Wald chi2(2) = 345.35

corr(u_i, X) = 0 (assumed) Prob > chi2 = 0.0000

comp Coef. Std. Err. z P>|z| [95% Conf. Interval]

educ 2.505574 .2409721 10.40 0.000 2.033277 2.977871

hlthexp .00671 .0009916 6.77 0.000 .0047664 .0086536
_cons 55.80166 1.372749 40.65 0.000 53.11112 58.4922

sigma_u 6.3470199
sigma_e 3.3804231
rho .77902078 (fraction of variance due to u_i)

You see that wald test 345.35 and it is significant and the value is 0.0000.

Hausman Test:
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

. hausman fixed .

Coefficients
(b) (B) (b-B) sqrt(diag(V_b-V_B))
fixed random Difference S.E.

educ 2.693282 2.505574 .1877079 1.132216

hlthexp .0037855 .00671 -.0029245 .0024246

b = consistent under Ho and Ha; obtained from xtreg

B = inconsistent under Ha, efficient under Ho; obtained from xtreg

Test: Ho: difference in coefficients not systematic

chi2(2) = (b-B)'[(V_b-V_B)^(-1)](b-B)
= 1.51
Prob>chi2 = 0.4700

Now you see that p value is 0.47 and it is greater than .05 and it is significant due to which we
accept fixed test due to random effect result is good.

Question No 5
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Briefly Explain the concept of Mediation and Moderation graphically.

Mediation:
Mediator

Independent Dependent

The mediator variable is one explain the relationship between two other variables. Sometime
direct relation are significant or sometimes non-significant. Mediator variable is the
"Middleman" between an independent variable and dependent variable.
We can define as A mediator variable that explains the how or why of an (observed) relationship
between an independent variable and its dependent variable.
Moderator
 Categorical
 Continuous

Independent

Moderator Dependent

Interaction

Moderator variable is one that influence the strengthen or weakness of a relationship between
two other variables. Moderator variable influence the strength or direction of relation between a
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

IV and DV. Objective of the moderator variable is to measure the strength of relationship
between IV and DV.

Question No 6
How can we remove autocorrelation in a time series data?

To remove auto correlation in a time series data, we will adopt following steps:
We will develop a regression model and we will remove the serial correlation (Autocorrelation)
from that regression model. The methods which are used to remove autocorrelation are given
below:
1. After adding one (or more periods) lag of dependent variable in the right side of model, the
serial correlation will be removed
i.e, y=a0+a1*x1+a2*x2+a3*x3+a4*lag1(y)+error
2. The second method which is used to remove the autocorrelation from the data is “first
differenced method”
Step 1. Convert all the variables into first differenced
Step 2. Then run the regression (Differenced variable) model through the origin.

Question No 7
Explain white noise in the data.

White noise in the data:

 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

We can define white noise as there is no serial correlation in the data. In other
words we can say that if there is no auto correlation problem in the data then data
is white noise.

The white noise has following features in the data is:

1. Residual variable is the white noise meaning that there is no serial correlation
residuals are homoscedastic and mean of the residual is zero
2. Residual variable is random or independent
3. Data must be stationary for good regression.

Question No 8
what are the tests to test serial correlation.

Tests to test serial correlation:

If we want to check whether there is serial correlation exists in the data or not:
1. In time series data the test which is used to test serial correlation is Durbin
watson test.
The null hypothesis for serial correlation is:
Ho: residuals are not serially correlated
And command is: test obs, yearly
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Estat durbinalt
if p-value greater than 0.05 then there is no serial correlation in the data
2. In panel data the test which is used to test serial correlation is Pesran test.

Question No 14
Analyze these data using EFA and varimax rotation procedure.

Descriptive Statistics

Mean Std. Deviation Analysis N

v1 4.3200 1.86458 25
v2 4.0400 1.85921 25
v3 3.9600 1.79072 25
v4 3.9200 1.80093 25
v5 3.8400 1.92959 25
v6 4.1600 1.84120 25
v7 4.2000 1.89297 25

Now you see that the S.D value must be 1 that means respondent answer the question without
biasness. If S.D is zero that remove that question.

Correlation Matrixa

v1 v2 v3 v4 v5 v6 v7

Correlation v1 1.000 -.004 .628 .082 .675 -.100 -.338

 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

v2 -.004 1.000 .151 -.248 .048 .582 -.251

v3 .628 .151 1.000 -.182 .480 .090 -.588

v4 .082 -.248 -.182 1.000 .272 .017 .469

v5 .675 .048 .480 .272 1.000 -.110 -.082

v6 -.100 .582 .090 .017 -.110 1.000 .014

v7 -.338 -.251 -.588 .469 -.082 .014 1.000

a. Determinant = .062

Correlation matrix is the square matrix of all variables. Diagonal value must be 1 and its your
choice you value below the diagonal or above the diagonal and these value must be greater than .
5 that means your factor are reliable.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .550

Approx. Chi-Square 57.994

Bartlett's Test of Sphericity df 21

Sig. .000

Bartlet test tell us the questions have strong relationship. That means your question are related to
the variables. The bartlet value must be less from .05 that is significant.

Anti-image Matrices

v1 v2 v3 v4 v5 v6 v7

Anti-image Covariance v1 .404 .044 -.124 -.037 -.202 .014 .071

v2 .044 .514 .078 .155 -.139 -.340 .126

v3 -.124 .078 .378 .077 -.126 -.135 .204

v4 -.037 .155 .077 .618 -.156 -.137 -.154

 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

v5 -.202 -.139 -.126 -.156 .412 .136 -.109

v6 .014 -.340 -.135 -.137 .136 .536 -.114

v7 .071 .126 .204 -.154 -.109 -.114 .463

a
v1 .716 .097 -.318 -.075 -.495 .029 .165

v2 .097 .414a .176 .274 -.301 -.648 .259

a
v3 -.318 .176 .638 .159 -.319 -.299 .489

Anti-image Correlation v4 -.075 .274 .159 .537a -.308 -.238 -.288

a
v5 -.495 -.301 -.319 -.308 .535 .290 -.249

v6 .029 -.648 -.299 -.238 .290 .345a -.229

v7 .165 .259 .489 -.288 -.249 -.229 .586a

a. Measures of Sampling Adequacy(MSA)

In this you see the anti image matrix. In this you also see the diagonal value must be greater than .5and
the other from the above or below it must be it must be greater than .5

Total Variance Explained

Component Initial Eigenvalues Extraction Sums of Squared Rotation Sums of Squared

Loadings Loadings

Total % of Cumulative Total % of Cumulative Total % of Cumulative

Variance % Variance % Variance %

1 2.485 35.505 35.505 2.485 35.505 35.505 2.315 33.076 33.076

2 1.821 26.013 61.518 1.821 26.013 61.518 1.731 24.729 57.805
3 1.339 19.131 80.649 1.339 19.131 80.649 1.599 22.844 80.649
4 .508 7.258 87.907
5 .376 5.373 93.280
6 .279 3.990 97.270
7 .191 2.730 100.000
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Extraction Method: Principal Component Analysis.

In this you see that only three factors explain your 80% of your data.

In scree plot from the L-Bow only 3 factor explain your whole data.
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

Rotated Component Matrixa

Component

1 2 3

v1 .897
v5 .868
v3 .762
v4 .867
v7 .817
v6 .911
v2 .860

Extraction Method: Principal Component

Analysis.
Rotation Method: Varimax with Kaiser
Normalization.
a. Rotation converged in 4 iterations.

Now you see that v1 v5 v3 these factor is about household behavior and v4 v7 shopping
behavior and the v6 v2 is life style.
V1-.897
V5-.868 Household behavior
V3-.762
V4-.867 Shopping behavior
V7-.817
 UNIVERSITY OF GUJRAT
Semester Spring 2020 – Final Term Examination (Online)
Department of Management Sciences

ANSWER SHEET
NAME: Roll Number: Section:
Zain Ul Abideen 17232720-090 A
Course Title: Course Code: Teacher Name:
Quantitative techniques in MGT-508 Dr. Fayyaz Ahmad
Business

V6-.911 Life style

V2-.860