ECONOMETRY GROUP TASKS

USING THE EVIEWS APPLICATION

By:
Mulyani Rahman Soulisa (19081194048)
Fadiar Ayu Faranisya (19081194072)
Fitria Hikmatul Jannah (19081194086)

DEPARTMENT OF ECONOMIC SCIENCE

FACULTY OF ECONOMICS
SURABAYA STATE UNIVERSITY
1. Estimation Model

From the estimation of the model above, the data interpretation is obtained in the form
of:
- Multivariate data interpretation:
From the analysis of the first multivariate data between the US military aid and
sales variables on its impact on defense budget and expenditure which does not
have a significant effect (Ho is accepted). Meanwhile, the PNB variable had a
significant impact on defense budget and expenditure because Ho was rejected.
- The constant value of C is 26.76726 with a probability of 0.0000
- The PNB coefficient value is 0.047740 with a probability of 0.1015
- The coefficient value of US military aid and sales is -1.231819 with a probability
of 0.0001
-
Then from the regression results above, it can be seen that the PNB variable has a
positive effect, while the US Military Sales and Assistance has a negative effect on
defense budget expenditures.
- The constant value of C is 26,76726. This means that defense budget spending
will increase by 26,76726.
- The value of the PNB coefficient is 0.047740, which means that PNB will
increase by 4% at each increase in defense budget expenditures, assuming other
variables remain.
- The coefficient value of US military aid and sales is -1.231819, which means that
aid and sales will decrease by 1.23% for each decrease in defense budget
expenditure, assuming other variables remain.
2. Goodness Of Fit or Model Feasibility Test

From the results of the estimation of the model above, in carrying out the model
feasibility test or goodness of fit, t test, f test, and the coefficient of determination are
required.
a. T Test (Regression Coefficient Test)
The results of the T test in the table below show the level of
significance of the influence of the PNB variable with US Military Assistance
and Sales on defense budget and expenditure:
The PNB variable has a t-statistic value of 7,72521 at a significant
level of α = 0.025 percent and a t-table value of 2.10092 is obtained. Absolute
value tstatistik> ttable (7.72521> 2.10092). Meaning Ho was rejected. This
shows that the PNB variable has a significant and positive effect.
The US Military Assistance and Sales variable has a t-statistic value of
-1.731157 at a significant level of α = 0.025 percent and a t-table value of
2.10092 is obtained. Absolute value tstatistik <ttable (-1.731157 <2.10092).
That means Ho is accepted. It shows that the US Military Sales and Aid
variables have no significant and negative effect.

b. F Test (Model Reliability Test)

Simultaneous hypothesis design (F test)
Decision-making:
DF 1 = k - 1 (numerator)
DF 2 = n - k (numerator / denominator)
 α (significant level) = 5%: 2 = 0.025
DF 1 = 2 -1 = 1
DF 2 = 20 - 2 = 18
Based on the F test in the figure beside the probability value of F stast
is 0.000 <4.41, it shows that the PNB variable with US Military Assistance
and Sales simultaneously affects the defense budget and expenditure.

c. Coefficient of Determination
The R-Square value in the table above is 0.920577, indicating that the
proportion of the influence of PNB and US Military Assistance and Sales on
the budget and defense expenditure variables is 92.05%. This means that the
defense budget and expenditure have an influence proportion of US military
sales and assistance by 92.05%, while the remaining 7.95% is influenced by
other variables not in the regression model.

3. Test the Assumptions of the Estimation Model

a. Multicollinearity

Because the VIF value (5.09671) of the two variables is not greater than 10, it
can be said that there is no multicollinearity in the two independent variables.
The above model is free from multicollinearity.

b. Autocorrelation
Prob Value. F of 0.003 can also be called the probability value of F count. F
count is smaller than the alpha level of 0.05 (5%), Ho is rejected, which means
there is autocorrelation. To heal data from autocorrelation, use the first level of
differentiation with the equation d (y) cd (x2) d (x3) or according to the name
on the workfile. So, we enter the equation d
(expenditure_budget_pertuangan_y_) cd (pnb_x2_) d
(help_penjualan_militer_as_x3_) so that the following results are obtained.
 From the autocorrelation healing process by entering the first level of
differentiation then the result of the prob value. F of 0.0713 is greater than the
alpha level of 0.05 (5%), so that Ho is accepted, which means there is no
autocorrelation.
c. Normality

JB count is greater than 0.05, it can be concluded that the residuals are
normally distributed. Pob Value. JB counts 0.564> 0.05, so it can be
concluded that the residuals are normally distributed, meaning that the
classical assumptions about normality have been fulfilled.
d. Linearity
Ramsey RESET Test
Equation: NORMALITY
Specification: Y X2 X3 C
Omitted Variables: Squares of fitted values

Value df Probability
t-
statist
ic 1.352334 16 0.1951
F-
statist
ic 1,828808 (1, 16) 0.1951
Likeli
hood
ratio 2.164537 1 0.1412

F-test summary:
Sum of Mean
Sq. df Squares
SSR
test 129.9795 1 129.9795
Restri
cted
SSR 1267,152 17 74,53838
Unres
tricte
d
SSR 1137,173 16 71.07331

LR test summary:
Value
Restri
cted
LogL -69.86672
Unres
tricte
d
LogL -68,78445

Unrestricted Test Equation:

Dependent Variable: Y
Method: Least Squares
Date: 11/24/20 Time: 12:13
Sample: 1962 1981
Included observations: 20

Varia Coefficien
ble t Std. Error t-Statistic Prob.

X2 0.011780 0.027267 0.432035 0.6715

X3 -0.186216 1.039514 -0.179138 0.8601
C 39.35969 10,59897 3,713539 0.0019
FITT
ED ^
2 0.003820 0.002825 1.352334 0.1951
 R-
squar
ed 0.928724 Mean dependent var 83.86000
Adjus
ted
R-
squar
ed 0.915359 SD dependent var 28,97771
SE of
regre
ssion 8.430499 Akaike info criterion 7.278445
Sum
squar
ed
resid 1137,173 Schwarz criterion 7.477592
Log
likelih
ood -68,78445 Hannan-Quinn criter. 7.317321
F-
statist
ic 69.49291 Durbin-Watson stat 0.659040
Prob
(F-
statist
ic) 0.000000

In this case, the prob.F value of 0.1951 is greater than 0.05, so it can be
concluded that the regression model has fulfilled the linearity assumption.
Because if the prob. F count> 0.05 alpha level (5%) then the regression model
fulfills the linearity assumption and vice versa.

e. Heteroscedasticity
Prob Value. F-Statistic or F count of 0.087 is greater than the alpha level of
0.05 so that based on the hypothesis test, Ho is accepted, which means there is
no heteroscedasticity.