Econometrics Assignment Case Study Analysis
The Multicol-linearity analysis provides the correlation between the variables. The Exhibit 3 shows that the funds in diversified, funds in stock, funds in bonds, annual gross income and the year of hire have the high correlation with the investment in funds.Whereas, the number of child and the rank in bank have the average or medium correlation with the investment in funds.
Exhibit 4 of the document contains the results from the STATA. The significance level is 0.00, which is lower than the significance level of 0.05 and provides strong statistical significant evidences to reject the null hypothesis and to accept the alternate hypothesis, which concludes that the Rank in bank, Year of hire, Bonus, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income and Number of Children have an influence on the investment in fund.
Moreover, the coefficients table represents the coefficients of each independent variable, which reflects the relationship between the Rank in bank, Year of hire, Bonus, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, Number of Children and the investment in fund.
At last, the coefficient of determination (r2) is a measure to find the variation in one variable against the variation in others. The value of r2 = 0.3429 indicates that if variation occurs in one variable; it will allow around 34 percent change in other variables, which allows us to make an accurate estimate for the Rank in bank, Bonus, Year of hiring, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, Number of Children and the investment in fund.
The Multicol-linearity analysis provides the correlation between the variables. The Exhibit 4 shows that the funds in diversified, funds in stock, and the year of hire have high correlation with the investment in funds, while the number of child, annual gross income, bonus and the rank in bank have average or medium correlation with the investment in funds.
Exhibit 5 of the document contains the results from the STATA. The significance level is 0.00, which is lower than the significance level of 0.05. It provides strong statistical significant evidences to reject the null hypothesis and to accept the alternate hypothesis, which concludes that the Rank in bank, Year of hire, Bonus, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, year of birth and Number of Children have an influence on the investment in fund.
Moreover, the coefficients table represents the coefficients of each independent variable, which reflects the relationship between the Rank in bank, Year of hire, Bonus, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, Number of Children, and year of birth and the investment in fund.
At last, the coefficient of determination (r2) is a measure to find the variation in one variable against the variation in others. The value of r2 = 0.3444 indicates that if variation occurs in one variable then it will allow around 34 percent change in other variables, which allows us to make an accurate estimate for the Rank in bank, Bonus, Year of hiring, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, Number of Children, year of birth and the investment in fund.
The Multicol-linearity analysis provides the correlation between the variables. The Exhibit 5 shows that the funds in diversified and funds in stock have high correlation with the investment in funds, while the number of child, bonus and the rank in bank have average or medium correlation with the investment in funds. In addition to this, the annual gross income, year of birth and the year of hirehave below the average correlation with the investment in funds.
Conclusion
As compared to the all other R square, it has been concluded that the best fitted model that represents the highest R square is the 0.3444, which indicates that if variation occurs in one variable then it will allow around 34 percent change in other variables, which allows us to make an accurate estimate for the Rank in bank, Bonus, Year of hiring, Funds in Stock, Funds in Diversified Portfolio, Annual Gross Income, Number of Children, year of birth and the investment in fund...............................
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