BUEC 333 Computing Guide

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Tabel of Contents

Section 1 - The Basics

• Introduction
• Computing Pre-requisites
• Notes on the Mac Environment for Beginners

Section 2 - Assignment Instructions

• Computing Assignment 1 - From Week #3
• Computing Assignment 2 - From Week #4
• Computing Assignment 3 - From Week #7
• Computing Assignment 4 - From Week #8
• Computing Assignment 5 - From Week #9

The Assignment Instructions are designed to get you going on each assignment. The instructions are not very detailed. Instead, you will be required to do quite a bit of reading, and, to think for yourself. A week after each assignment is due, answers will be posted on the Assignment Answers page.

Section 3 - The Final Project

The Final Battle Project

SECTION 1

Introduction

Computing Pre-requisites

			buec333@sfu.ca

Notes on the Mac Environment for Beginners

Excel works just as well on the Macs as it does on the IBMs. Thus, for BUEC 333, you can use either type of computer. What follows are some notes on using the Mac computers on campus.

You will find it convenient to use several programs at once. As with Windows 3.1 and 95, you must click on the program icon to start each program.

Once you start a program, it will not always be obvious that the program is actually running. Some of the programs do not have windows. Specifically, SimpleText and DropText, can both run without a window. To restart these programs, you will need to know how to use the Mac program menu system. The Menu Bar is the small gray band at the very top of the screen. In the top right hand corner on the Menu Bar, there is a small icon that is associated with the program window that is currently open. If you hold the mouse button down on this icon, a list will appear showing you all the programs currently running. To switch into the program of your choice, you simply highlight the appropriate name. How do you know that the program has started to run, or is now active? You can tell by looking at the icon in the right corner of the Menu Bar, or by looking at the menu options. They will change as the active program changes.

Notes on MAC Crashes

The Macs crash with alarming frequency. They crash for one of two reasons:

What to do if it Crashes

If the computer freezes, the only solution is to turn in off, give it a few seconds, and then start again.

If Shazam freezes, close it, reopen it and try again. If it happens a second time, check over all you command files, etc.

			buec333@sfu.ca

Info. on Computing Assignment 1 - From Week # 3

"Get the real estate sales data from my Web Page and test for the difference in variance of asking and selling prices using Excel. Hand in your Excel output".

Here are the steps you will have to go through to complete this assignment.

1. Obtain the data from the Web Page and save it to disk.


2. If you are using a Mac, you will have to clean up the data.


3. Open Excel and import the data from your disk into an Excel Workbook.


4. Perform the Test: There are two ways to do this. Either use the output from Data Analysis: Descriptive Statistics tool, or else use the Two-Sample F-Test of Variances tool.


5. Interpret your output. This is the most important step in the whole process. Excel is just a glorified calculator. In order to get full marks on the assignments and on the final project, you must demonstrate that you understand the Excel output you have generated.

A1.1 How to Obtain the data from the Web Page and Save it to Disk.

Follow these steps:

1. Goto the Web Page the contains that Real Estate Sales data. The data should fill the screen of your Web Browser with seven columns of numbers. You can go through the Prof's Web-page, or you can follow this link to real_estate_sales.data
2. To download this data file to your disk, simply click on the file menu and select save.
3. An option box will then appear on the screen. If you are using an IBM, select the A Drive. If you are using a Mac, select your disk from the desk-top and save the file.

   If you are using a Mac, MAKE SURE THAT THERE ARE NO SPACES IN THE FILE NAME.

4. The default file name will work. The Default file name is:

   real_estate_sales.data for Macs

   real_est.dat for IBMs.

5. After you have saved the files, you will also want to save the header file.

   real_estate_sales_data.header.

   Again, you can go through the Prof's web page, or you can get the information by following this link to real_estate_sales_data.header

   What is a header file?

   This is actually an important question. Many student have wasted a great deal of their time and ended up very frustrated because they don't understand exactly what a header file is.

   A header file contains a description of each column of numbers in the data set. Without the header, it is often difficult to work out which column is associated with which variable. For instance, in the real_estate_sales.data file, does the first column of numbers represent the asking prices, or does it represent selling prices? What does the third column of numbers represent?

   The header file is only for your own benefit. When you do your project, you will obtain data from the CANSIM database. In order to work out what the numbers you have obtained actually represent, you will have to look to the associated header file.

   If you ever have trouble importing your data into Excel, or reading it into Shazam, your problems will have nothing do with the header file. Header files are for Human consumption only. Excel or Shazam will never be aware of your header files.

   For Computing Assignment #4, you will not have to create a Header file because you will be inputing the data yourself. Because you input the data you will know what each column of numbers represent. You can even label them accordingly in Excel.

A1.2 How to Clean Out Formating Code - Macs Only

If you are using an IBM machine, skip this part.

Once you have downloaded the data, you can view it by clicking on the file name real_estate_sales.data in your disk's directory. The Mac will automatically start an Editor Program called SimpleText.

Your Datafile will then appear in SimpleText. You will notice that the data is no longer in nice neat columns. Instead, it looks like a real mess. Do not worry. The main data is still there. However, there are also a bunch of formatting instructions embedded in the data. These formatting instructions were put there to allow Netscape to understand and present the data.

In order to use the data in the econometrics program Shazam or to import the data into Excel, you must first clean these formatting instructions out of the Datafile.

To do this, you will need to use a program called DropText.

Before you open Drop Text, you must first close the document in simple text. If you do not do this, Drop Text will not be able to open the document. You can not be looking at a document in one program and trying to change it in another program.

To open DropText

Do not use the other version of DropText, version 1.3f. Version 1.3f crashes the computers. Note that DropText does not have a window associated with it. Instead, only the MenuBar changes.

Select the option OPENFILE from the FILE menu.

An option box will appear. Choose your disk from the DeskTop and then select the Datafile.

Then, click on the OPEN AND CONVERT button.

A box will quickly flash up on the screen saying "Converting File".

Your data has now been converted.

A1.2.1 How to Check that Your Data Has Been Converted

To Check that your data has been converted, open up SimpleText and re-open the Datafile.

You will see that the data now appears in 7 neat columns.

Before you continue, you must close this file. Shazam will not be able to access the Datafile if it is already open in SimpleText.

A1.3 How to import the data from your disk into an Excel Workbook.

A "Workbook" is the name given to the type of file that Excel uses to save your work. If you are unfamiliar with Excel, you should read chapters 1 and 2 of Data Analysis Using Excel 5.0, by Middleton before going any further.

Remember that you saved the Real Estate Sales data onto your disk. If you are on a Mac, you probably called it Real_Estate_Sales.data . If you are using and IBM machine, you probably called it Real_est.dat .

Follow these steps to bring the information into Excel:

1. Open up Excel.
2. Goto the File menu and select Open. Choose the directory that contains your disk. On the IBMs, this means select A drive. On the Macs, this means you have to first select the desk-top, and then click on your disk name.
3. You now have to find the file containing the Real Estate Sales data. At the bottom of the Open dialog box, there is a box which allows you to select the file type. Choose All Files.
4. Your file, be it Real_Estate_Sales.data or Real_est.dat should now appear in the list of files. Double click on the file name, and then press OK.
5. Because the Real Estate Sales Data is not in Excel format, Excel will automatically present you with the Text Import Wizard.
   There is a section near the top of the Wizard box labeled Original Data Type.
   It tells you to Choose the file type that best describes your data.
   Select Delimited.
   Press Next.
6. In Step 2 of the Text Import Wizard, there is a box called Delimiters.
   Click the dots beside Tab and Space.
   Press Finish. You don't need to go to Step 3 as you would only select the default settings anyway.
7. The Real Estate Data should now appear in Excel in nice neat columns.

There is only one problem: You don't know what each of those columns represents.

To make you life easier, it is a good idea to include headings for each of the cloumns.

Go through the following steps:

1. Open up the header file. You can do this in Excel, or using a text editor program like Word, Word Perfect, Notepad, Simple Text, etc.
2. Write down on a piece of paper what the first column represents, the second column, etc.
3. Go back into Excel, and open up the file that contains the data you have just imported.
4. Click on the A1 cell.
5. Go to the Insert Menu, then select Rows.
6. You should now have a blank row above all of your data. In this blank row, insert the labels for the data

   For example, Ask, Sell, etc

   .

A1.4 How to Perform the test for Computing Assignment #1

There are two ways to test for differences in the variance of asking and selling prices.

The first method takes a little more effort, but is far more instructive.

• Read section 4.1 (pages 35-40) of Middleton's Data Analysis Using Excel 5.0. This section tells you how to use the Analysis Tool: Descriptive Statistics tool..
• Use the Descriptive Statistics tool to get the information you need to calculate the F-test described in Section 9.8 of Newbold's Statistics for Business and Economics. You will have to use the Descriptive Statistics tool twice. Once on the column of asking prices and once on the column of selling prices.
• Finally, you have to use the Excel output to manually calculate the F-statistic, and then look up the appropriate critical value in the table at the back of your text.

• Read section 13.4 (pages 35-40) of Middleton's Data Analysis Using Excel 5.0. This section tells you how to use the F-test Two Sample for Variances tool.
• Once you have run the test you just have to Interpret your output.

A1.5 Notes on Interpretation for Computing Assignment #1

You must Interpret all of your Excel output. Handing in Excel output with output and Interpretation only indicates that you can follow these instructions or photo-copy. It does not indicate that you have learnt any of the econometrics.

You must always explain what the output means.

What does it mean to Interpret your output?

In this case, it is really easy and only involves a couple of lines. Your TA certainly won't mind if you just write your Interpretation at the bottom of the print out of your Excel workbook.

Follow these steps:

• State the null hypothesis. In this case, it is:
  Ho: The variance of selling prices is the same as the variance of the asking prices
• Write out the formula from page 366, which shows how the F-stat was calculate
d.
• Write down the value of that F-test statistic based on the Excel output and your calculations.
• Look up a critical F-value in an F-distribution table and note it in your explanation.
• Compare the critical value to the observed F-test and state whether or not the test was accepted or rejected.

			buec333@sfu.ca

Info. on Computing Assignment 2 - From Week # 4

"Again using real estate sales data from my Web page, estimate a least squares regression of selling on asking prices using EXCEL. Hand in your EXCEL output.".

Here are the steps you will have to go through to complete this assignment.

1. Obtain the data from the Web Page and save it to disk.
   ( See Ass#1 )


2. If you are using a Mac, you will have to clean up the data.
   ( See Ass#1 )


3. Open Excel and import the data from your disk into an Excel Workbook. ( See Ass#1 )


4. Run the regression by following Instructions in Chapter 14


5. Interpret your output. This is the most important step in the whole process. Excel is just a glorified calculator. In order to get full marks on the assignments and on the final project, you must demonstrate that you understand the Excel output you have generated.

A2.4 Tips for running the regression according to the Instructions in Chapter 14

Middleton's book is very clear and helpful. You should have not trouble following is.

Make sure that you use the tools outlined in both sections 14.1 and 14.2

A2.5 Tips on Interpretation for Assignment #2

In order to correctly Interpret the output for the regression, you must think carefully about what is it that you are trying to estimate.

			buec333@sfu.ca

Info. on Computing Assignment 3 - from Week #7

"Again using real estate sales data from my Web page, estimate a least squares regression of selling on asking prices, days on sale, and lot size, using EXCEL. Hand in your EXCEL output.".

Here are the steps you will have to go through to complete this assignment.

1. Obtain the data from the Web Page and save it to disk.
   ( See Ass#1 )


2. If you are using a Mac, you will have to clean up the data.
   ( See Ass#1 )


3. Open Excel and import the data from your disk into an Excel Workbook. ( See Ass#1 )


4. Run the regression by following Instructions in Chapter 16


5. Interpret your output. This is the most important step in the whole process. Excel is just a glorified calculator. In order to get full marks on the assignments and on the final project, you must demonstrate that you understand the Excel output you have generated.

A3.4 Tips for running the regression according to the Instructions in Chapter 16

You will have to begin by switching round the columns containing the asking and selling prices.

• Select Column A, then select insert and click on column.
• Select with the Selling Prices in it. Choose Cut. Paste the information into the new Column A.
• Delete the blank remaining column.

A3.5 Tips on Interpretation for Assignment #3

			buec333@sfu.ca

Info. on Computing Assignment 4 - from Week #8

"Hand in your EXCEL output together with your report (1 page) for question 37 from chapter 13.".

There is not much new here in terms of computer work, with one exception. In this assignment, you will have to generate your own data file.

Here are the steps you will have to go through to complete this assignment.

1. Open up a blank workbook in Excel and enter the data


2. If you are using a Mac, you DO NOThave to clean up the data.
   


3. Run the regression by following Instructions in Chapter 16 and maybe conduct extra tests


4. Interpret your output. This is the most important step in the whole process. Excel is just a glorified calculator. In order to get full marks on the assignments and on the final project, you must demonstrate that you understand the Excel output you have generated.

A4.1 Tips for entering the data

You simply have to copy the table in the book into Excel.

To make you life easier, it is a good idea to include headings for each of the cloumns.

A4.2 Mac users do not have to use Drop-Text

Because you entered the data straight into EXCEL, you don't have to clean up any files. You only have to clean up files that you download through Netscape. Because you didn't use Netscape to obtain the data for this assignment, you do not have to worry about anything.

A4.3 Tips for running the regression and for those extra tests

Because this is a multiple regression, you can't begin with a graph. In this case, any graph you have to exist in three dimensions.

Instead, you will have to begin by using the regression tool.

You will need to test the significance of the parameter estimates. This means that you should be testing the following hypotheses:

H₀: B_x1 = 0

and

H₀: B_x2 = 0

All the information you need to perform these tests is included in the output given to you when you use the regression tool.

A4.4 Tips on Interpretation for Assignment #4

Your main task here is to correctly interpret the coefficients on X1 and X2, and to perform and interpret the t-tests on the coefficient estimates.

If you correctly interpret the t-tests, you should be able to say whether or not B₁ or B₂ are statistically different from zero.

The answer set to this assignment will also include examples of tests for Heteroscedasticity and Autocorrelation. You will be taught about these tests in weeks 9, 10 and 11. You do not need to do these tests for this assignment. The answers will only include them to give you examples that should help you when you are doing your project.

			buec333@sfu.ca

Info. on Computing Assignment 5 - from Week #9

"Hand in your EXCEL output together with your report (1 page) for question 6 from chapter 14.".

For this question, you will need to create a datafile and command file, just as you did for assignment #4.

You should definitely be including a few appropriate F-tests and maybe even some plots of the predicted errors against Y in an effort to visually check for Heteroscedasticity.

Here are the steps you will have to go through to complete this assignment.

1. Open up a blank workbook in Excel and enter the data


2. If you are using a Mac, you DO NOThave to clean up the data.
   


3. Run the regression by following Instructions in Chapter 16


4. Run appropriate smaller regression and then conduct F-tests.


5. Plot the residuals, test for autocorrelation and visually check for Heteroscedasticity


6. Interpret your output. This is the most important step in the whole process. Excel is just a glorified calculator. In order to get full marks on the assignments and on the final project, you must demonstrate that you understand the Excel output you have generated.

A5.1 Tips for entering the data

See the corresponding section for assignment #4. There is nothing new here.

A5.2 Mac users do not have to use Drop-Text

Once again, because you entered the data straight into EXCEL, you don't have to clean up any files. You only have to clean up files that you download through Netscape.

A5.3 Tips for running the regression.

Nothing new here.

A5.4 Tips on running appropriate F-tests

You will have to run a second regression, based on a smaller data set, ie a data set without some of the variables. Then, you will have to use information on the Restricted Sum of Squared Residuals (taken from the second regression) and the Unrestricted Sum of Squared Residuals (taken from the first regression) to manually calculate the F-stat.

A5.5 How to plot the residuals, test for autocorrelation and visually check for Heteroscedasticity

These are advance tests that you are only just now learning about in class. You do not have to do them for this assignment, however, if you attempt them you wil be able to get good feed back from your TA before you do your project.

You can visually check for autocorrelation by plotting the residuals over time, or else plotting the residuals against their lagged values. If you do the second type of plot, you will only be able to do if for observations 2 through to 10.

You can also conduct a Durbin Watson test for first order autocorrelation. Chapter 18 in your book tells you how to do this.

You can check for visually check for Heteroscedasticity by plotting the squared resdiuals over time, or against y, or one of the dependent variables.

A5.6 Tips on Interpretation for Assignment #5

This should be a thorough interpretation of the output.

You will want to go over basics, such as literal interpretation of each of the parameter coefficients. However, you will also want to go a few steps further.

Certain t-tests will reject certain variables. Having deceided that these variables are individually insignificant, you will have to find out if they are jointly insignificant before you can drop them from the model.

To do this, you will have to perform an F-test on those variables; hence the instructions above on how to perform an F-test.

If you attempted some of the more advanced tests (ie the tests for autocorrelation and heteroscedasticity) you must interpret the implications of these tests.

The answer set to this assignment will also include examples of tests for Heteroscedasticity and Autocorrelation. You will be taught about these tests in weeks 9, 10 and 11. You do not need to do these tests for this assignment. The answer set will only include them to give you examples that should help you when you are doing your project.