Question 3
Select any economic, finance or business model that you have studied during your degree and apply it econometrically to the following questions.
(a) Write down and explain a regression equation that would allow you to estimate this model, highlighting the expected sign of your estimators and explaining the functional form selected.
5 Marks
(b) Explain and describe what data you would need to carry out this study.
5 Marks
(c) What hypotheses would you like to test? Describe how you would go about this.
5 Marks
(d) Discuss any econometric testing issues that you would expect to encounter with this model, explaining why such issues would arise with your model.
6 Marks
(e) Explain with the aid of equations and diagrams the differences between experimental and observational data.
4 Marks
Total 25 marks