Introduction to econometrics II eco 356 faculty of social sciences course guide course Developers: Dr. Adesina-Uthman

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Introduction to Econometrics ECO 356 Course Guide and Course Material

2.5.5.0 SUMMARY
In this unit, the essentials and applications of the concept of dummy variable estimation was introduced. Byway of illustrative example to the students, an investigation is made which showed that in the application of dummy variables the regression lines for the different groups differ only in the intercept term but have the same slope coefficients. We also discussed two traps that may occur in the application of dummy variable. First, change in reference category, in which a reference variable is created out of the variables inconsideration for analysis. Second, the slope dummyvariables; which considered the slope of the regression line not being the same for each category of the qualitative variables.
2.5.4.0 CONCLUSION
This unit discussed the use of dummy variable estimation to solve some variables that are existing or being introduced into a regression equation which are qualitative or immeasurable in numerical terms. In this discussion, students are made aware that the inherent assumption for the application of dummy variables is that the regression lines for the different groups differ only in the intercept term but have the same slope coefficients.
2.5.6.0 REFERENCES FURTHER READING
N Gujaratti, D. (2004). Basic econometrics. McGraw-Hill, New York.
Maddala, GS, &Lahiri, K. (1992).Introduction to econometrics (Vol. 2). New York
Macmillan.
Dougherty, C. (2007). Introduction to econometrics. Oxford University Press, USA.
Dougherty, C. (2014). Elements of econometrics.London: University of London.

INTRODUCTION TO ECONOMETRICS II

ECO 306

NOUN
96
UNIT 6: SPECIFICATION OFREGRESSION VARIABLES:A PRELIMINARY
SKIRMISH
CONTENTS
2.6.1.0 Introduction
2.6.2.0 Objectives
2.6.3.0 Main Content
2.6.3.1 Model Specification of Regression Variables
2.6.4.0 Summary
2.6.5.0 Conclusion
2.6.6.0 References/Further Reading

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