Coursework This handout provides information about the module’s second coursework. Below, you will find the coursework as well as information about the marking scheme. * The coursework requires you to engage with regression analysis by performing various regressions in Eviews and by commenting on the main results. * The aim of the coursework is to test your ability to handle datasets with the use of a specialist software and to provide critical and informative comments on the outcome of the analysis.

You are expected to use Eviews for your analysis. The use of any other alternative software should be negotiated with the lecturer; * This coursework is an individual piece of work and accounts for 20 marks * The deadline is: Friday 16th December * Submission: your report should be typed with all tables, graphs and text included in one single doc or pdf file. You can submit the file via Blackboard or you can submit a hardcopy to the reception office. Notice that if you submit online the deadline will be 11. 9pm on Friday 16th December while if you submit a hardcopy the deadline is 4pm on the same day. * Marking scheme * A first class mark is awarded to the work that: * Contains well drawn and clear graphs, tables and regression output; * The analysis is clear, informative, detailed and makes references to economic theory and to technical aspects of regression analysis; * All questions are addressed in a comprehensive way with the use of appropriate graphs and tables.

While answering each individual question, the good student will also appreciate that each question is part of the overall investigation of the determinants of labour supply; * The coursework is well presented, written in good English with an accurate use of referencing to external resources * A grade B is awarded to the work that broadly meets the requirements above but that shows some inaccuracies in the analysis and in the presentation of the information; * A grade C is awarded to the work that shows broad knowledge and understanding of the matter.

However, the work is likely to reveal only a partial understanding of either the economic and statistical features of the analysis; * A grade D is awarded to the work that shows a very basic understanding of regression analysis. There is evidence of limited ability to use Eviews and, more broadly, to engage in a meaningful and informative analysis of the data; * A fail mark is awarded to the work that shows no understanding of regression analysis and no ability to handle data and to meaningfully interpret the outcome from the regression analysis.

Please turn page for the coursework text > The government is interested in understanding what factors affect a household’s annual expenditures on food. Previous research and evidence from various pressure groups suggest that factors such as household income, household size and number of children all play a role in explaining annual household expenditures. You have been asked to produce a report that investigates the determinants of household’s food expenditures and to present the report to local policymakers.

To carry out your analysis you have been supplied with the dataset ‘foodexpenditures. wf1’ available in the Coursework folder on Blackboard. The dataset contains data for a random sample of size 300 from a large population of households about the following variables: FOODEXP = expenditures on food (thousands of Euros) HINC = household income (thousands of Euros) HSIZE = number of people living in the household NKIDS = number of children under the age of 18

Use Eviews to address the following tasks that policymakers have asked you to perform: a) Produce scatter-plots of the relationship between FOODEXP and the other explanatory variables. Comment on the graphs. Produce a correlation table and comment on the statistics. (no more than 200 words)(10 marks) b) Regress FOODEXP on HINC only. Conduct a statistical analysis and give your comments. Does the regression outcome fit with your prediction of the relationship between the two variables?

Explain. (no more than 300 words)(30 marks) c) Regress FOODEXP on all three regressors. Conduct a statistical analysis and give your comments on the regression outcome. (no more than 300 words)(30 marks) d) Suppose that you are told that an increase of €1000 in the annual household income, while household size and number of children remain unchanged, will on average, lead to an increase of more than €220 in annual food expenditure. Does the evidence confirm this suggestion? no more than 100 words)(10 marks) e) You present the results of your regression analysis to government policy makers. a. In view of the results from your research, what kind of policies would you suggest the government introduces? (no more than 100 words)(5 marks) b. After looking at your research results some policymakers raise some issues about the validity of your research. What kind of criticism do you think they are likely to make? Explain. (no more than 100 words)(15 marks)