University of Dhaka

Department of Applied Mathematics

First Incourse Examination 2021
Fourth Year B.S.(Honors)
Course: Econometrics (AMTH 408)
Full Marks: 15
(Submit by 3rd May)

1. A soft drink bottler is analysing the vending machine service routes in his distribution
system. He is interested in predictiing the amount of time required by the route driver
to service the vending machines in an outlet. The service activity includes stocking
the machine with beverage products and minor maintanance or housekeeping. The
inndustrial engineer responsible for the study has suggested that the most important
variables affecting the delivery time (y) are the number of cases of product stocked
(x1 ) and the distance walked by the route driver (x2 ). The eingineer has collected 15
observations on delivery time, which are shown in the follwoing table.

Observation Delivery time Number of cases Distance (ft)

number (y) (x1 ) (x2 )
1 18 7 330
2 8 2 110
3 18 7 210
4 79 30 1460
5 22 5 605
6 40 16 688
7 21 10 215
8 14 4 255
9 20 6 462
10 24 9 448
11 29 10 776
12 15 6 200
13 19 7 132
14 10 3 36
15 35 26 770

You need to estimate the regression equation

y = β0 + β1 x1 + β2 x2 + , i = 1, 2, . . . , 15 (1)

(a) Write the design matrix X and calculate X 0 X. [1]

(b) Calculate (X 0 X)−1 (upto 10 decimal places) and X 0 y [1]
(c) Estimate the regression paremeter vector β = (β0 , β1 , β2 )0 [1]
(d) Interpret the estimated coefficients of the variables x1 and x2 . [1]
(e) Estmaite the variance-covariance matrix. [1]
(f) Calculate the total sum of squares, regression sum of squares, and error sum of [1]
squares.
(g) Construct the ANOVA table [1]
(h) Calculate and interpret the value of adjusted R2 . [1]
(i) Estimate the value of error variance. [1]
(j) Test the null hypothesis that the variable x2 has no effect on y. You might need [1]
the value t(12,0.025) = 2.18
(k) What is the value of the deviance of model (1) [1]
(l) Test the null hypothesis [2]
H0 : β1 = β2 = 0
You might need the value F(2,12,0.05) = 3.88
(m) Find the fitted values of y. [1]
(n) Hence, find the residuals. [1]

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