6. For this question, use the regression model from 5(c) to generate your forecasts. (Run the regression
in 5(c) again to be sure it is the most recent regression you have run.) As you complete each step of
the data entry, I suggest you use the following code (as a single line) to check your work:
list year median_real_rent avg_real_wage housing_stock employment
1n_avg_real_wage 1n_employment In_housing_stock in -6/L
a. Report the code to expand the dataset to add two more blank observations.
b. We are going to generate two different hypothetical forecasts for 2018. Report a single
line of code to enter 2018 as the year for both of these new observations.
c. Perform the following steps. (Do not report your code. These steps are not graded.)
i)
Enter $75,000 as the average real wage for both observations.
ii)
Enter 730,000 as the total employment for both observations.
iii)
Enter 400,000 as the housing stock for observation 113.
iv)
Enter 450,000 as the housing stock for observation 114.
v)
Update the variable 1n_avg_real_wage for both observations.
vi)
Update the variable 1n_employment for both observations.
vii)
Update the variable In_housing_stock for both observations.
d. Report the code to generate the predicted values of In_median_real_rent. Call
your new variable for these predicted values 1n_mrr_hat.
e. Undo the log-transformation of In_mrr_hat to generate the predicted levels of median
real rent for observations 113 and 114. Report these values; do not report your code.
Round to the nearest dollar.
