UNIVERSITI TUNKU ABDUL RAHMAN (UTAR)

FACULTY OF BUSINESS AND FINANCE (FBF)

Course Plan
1.
2.

3.

Unit Code &

Unit Title:
Course of
Study:

7.

Year of
Study:
Year and
Trimester:
Credit Hour
Lecturing &
Tutoring
hours
Lecturer:

8.

Tutor:

9.
10.

Moderator
Mode of
Delivery:
Objective:

4.
5.
6.

11.

12.

Learning
Outcome:

UBEQ2013 BASIC ECONOMETRICS

Bachelor of Economics (Hons) Financial Economics
Bachelor of Business Administration (Hons) Banking and Finance
Bachelor of Finance (Hons)
Year Two-May 2016 (Session 201605)
201601
3 credit hours
2 hours lecture per week for the duration of 14 weeks
1.5 hours tutorial per week for the duration of 14 weeks
Ms. Tang Siu Eng, MSc, BApplSc (Hons), tangse@utar.edu.my
Prof. Dr Choong Chee Keong, choongck@utar.edu.my
Ms. Lau Siew Yee, sylau@utar.edu.my
Mr. Keh Chia Guan, kehcg@utar.edu.my
Dr Eng Yoke Kee, engyk@utar.edu.my
Lecture and Tutorial
The unit aims to provide some fundamental concepts and definitions to
simple and multiple linear regression methods, including their use in
estimating and testing the validity of models in economics, finance and
business.
After completing the subject, students will be able to:
1. Explain the classical normal linear regression model and the ordinary
least squares method
2. Estimate the simple linear regression, multiple linear regression, and the
dummy variable regression
3. Interpret regression results and make preliminary statistical inferences
4. Test the validity of models in economics, finance, and business

Unit Plan of UBEQ2013 Basic Econometrics

13.

Reading List: Main Text:

1. Gujarati, D.N., & Porter, D.C. (2009). Basic econometrics. (5th ed.).
Boston, MA: McGraw-Hill.
Additional Text:
2. Hill, R. C., Griffiths, W. E. & Judge, G.G. (2011). Principles of
econometrics. (4th ed.). New York: John Wiley.
3. Stock, J. H. & Watson, M. W. (2010). Introduction to econometrics. (3rd
ed.). Boston, MA: Addison Wesley.
4. Wooldridge, J. M. (2013). Introductory econometrics: A modern
approach. (5th ed.). Mason, Ohio: Thomson/South-Western.
5. Asteriou, D. (2007). Applied econometrics: A modern approach using
EViews and Microfit. Basingstoke: Palgrave MacMillan.
6. Griffiths, W. E., Hill, R. C., Lim, G. C. (2011). Using EViews for
principles of econometrics (4th ed.). Hoboken, NJ: John Wiley & Sons.

14.

Method of
Assessment:

No. Method of Assessment

1.
Coursework
a) Term Project
b) Mid-term Test
Total
2.
Final Examination
GRAND TOTAL

Total
40%
20%
20%
40%

(50 marks)
(50 marks)
(100 marks
60%
100%

1. Coursework (40%)
a) Group Assignment 20% (50 marks)
- A term project is required in this unit, which introducing students to
applied research and the use of econometrics.
- The project should be done in teams of FIVE to SIX students. The
project is due on 10th August 2016 (Wednesday) by 5 P.M. Marks
will be deducted for late submission.
Computer Lab sessions: The statistical software package, EViews, will be
used for statistical analysis. Lab sessions will comprehend instructions and
examples that are useful in completing the term project.
b) Mid-term Test 20% (50 marks)
- The duration of the test is 1 hour and scheduled in WEEK 8 (19th
July 2016). The test consists of TWO (2) structural essay questions,
which cover topics 1 to 5.
2. Final Examination 60%
The final examination for this subject is 2.5 hours and consists of TWO
sections:
Section A (40 marks) : One compulsory question.
Section B (60 marks) : 3 questions in which students are required to
answer any 2 questions

Unit Plan of UBEQ2013 Basic Econometrics

15.

Course
Synopsis

16.

Remark:

This unit focuses on the econometric theory at fundamental level. The topics
include the classical assumptions underlying the linear model; the properties
of ordinary least squares estimator; probability distributions and their
application to interval estimation and hypothesis testing; the problems of
heteroscedasticity, serial correlation, multicollinearity and model
specifications; and diagnostic testing.
ACADEMIC REGULATIONS
Plagiarism
Plagiarism is defined as the submission or presentation of work, in any form,
which is not one's own, without acknowledgment of the sources. If a student
obtains information or ideas from an outside source, that source must be
acknowledged. Another rule to follow is that any direct quotation must be
placed in quotation marks and the source immediately cited.
Plagiarism is also defined as copy of all or part of the work of another
student(s) of current or previous batch of this University or another higher
learning institution.
The University's degree and other academic awards are given in recognition
of the candidate's personal achievement. Plagiarism is therefore considered
as an act of academic fraudulence and as an offence against University
discipline.
Intellectual Property
Copyright must be seriously protected. The University takes a strong stand
against any illegal photocopying of textbooks and any other materials by
students. Students are forewarned of the consequences and the penalty that
may be meted out if they are "caught in the act".
Mode of Referencing
Students are advised to incorporate proper academic modes of referencing.
The normally acceptable mode of academic referencing is the American
Psychological Association (APA) system.

Unit Plan of UBEQ2013 Basic Econometrics

Teaching Plan
Week
1
(30/05

05/06)

Lecture, Tutorial & Assignment Plan

Lecture Topic
Tutorial /
Continuous
Assignment
Assessment
Topic 1: Introduction
Tutorial 1
What is Econometrics?
(Topic 1)
Methodology of Econometrics
Types of Econometrics
Mathematical and Statistical
Prerequisites

Reference
Gujarati &
Porter (2009)
(Introduction:
page 1-12)

2
(06/06

12/06)

Topic 2: The Nature of Regression Tutorial 1

Analysis
(Topic 1)
The Modern Interpretation of
Regression
Regression versus Causation
Regression versus Correlation
The Nature and Sources of Data
for Economic Analysis

Gujarati &
Porter (2009)
(Chapter 1:
page 15-28)

3
(13/06

19/06)

Topic 3: Two-Variable Regression Tutorial 2

Analysis: Some Basic Ideas
(Topic 2)
The Concept of Population
Regression Function (PRF)
The Meaning of the Term Linear
Stochastic Specification of PRF
The Significance of Stochastic
Disturbance Term
The Sample Regression Function
(SRF)

Gujarati &
Porter (2009)
(Chapter 2:
page 34-48)

4
(20/06

26/06)

Topic 4: Two-Variable Regression Tutorial 3

Analysis:
The
Problem
of (Topic 3)
Estimation
The Method of Ordinary Least
Squares (OLS)
The Classical Linear Regression
Model Assumptions
Properties of Least-Squares
Estimators: The Gauss-Markov
Theorem
The Coefficient of
Determination

Gujarati &
Porter (2009)
(Chapter 3:
page 55-84)

5
(27/06

03/07)

Topic 5: Classical Normal Linear

Regression Model
The Probability Distribution of
Disturbances
The Normality Assumption for

Gujarati &
Porter (2009)
(Chapter 4:
page 97-102)

Unit Plan of UBEQ2013 Basic Econometrics

Tutorial 4
(Topic 4)

Week

Lecture, Tutorial & Assignment Plan

Lecture Topic
Tutorial /
Continuous
Assignment
Assessment
Disturbances
Properties of OLS Estimator
Under the Normality
Assumption
The Method of Maximum
Likelihood

6
(04/07
-10/07
)

Topic 6: Interval Estimation and

Hypothesis Testing
Interval Estimation: Some Basic
Ideas
Confidence Intervals for
Regression Coefficients
Confidence Intervals for
Variances
Hypothesis Testing: The
Confidence-Interval Approach
Hypothesis Testing: The Test-ofSignificance Approach
Regression Analysis and
Analysis of Variance
Evaluating the Results of
Regression Analysis

Tutorial 5
(Topic 5)

7
(11/07

17/07)

Topic 7: Extensions of the TwoVariable Linear Regression Model

Regression through the Origin
Scaling and Units of
Measurement
Regression on Standardized
Variables
Functional Form of Regression
Models
How to Measure Elasticity: The
Log-Linear Model
Semilog Models: Log-Lin and
Lin-Log Models
Choice of Functional Form

Tutorial 6
(Topic 6)

8
(18/07

24/07

Topic 8: Multiple Regression

Analysis: The Problem Of
Estimation
The Three-Variable Model:
Notation and Assumptions
Interpretation of Multiple
Regression Equation
The Meaning of Partial

Tutorial 7
(Topic 7)

Unit Plan of UBEQ2013 Basic Econometrics

Reference

Gujarati &
Porter (2009)
(Chapter 5:
page 107-134)

Group Assignment
Given Date : Week 7
Due date for
assignment submission:
Week 11, 10/8/2016
(Wednesday), before
5.00pm

Gujarati &
Porter (2009)
(Chapter 6:
page 147-175)

Gujarati &
Porter (2009)
(Chapter 7:
page 188-215)

Week

Lecture, Tutorial & Assignment Plan

Lecture Topic
Tutorial /
Continuous
Assignment
Assessment
Regression Coefficients
OLS and Maximum Likelihood
(ML) Estimation of the Partial
Regression Coefficients
The Multiple Coefficient of
Determination R2 and the
Multiple Coefficient of
Correlation R
The Relationship between R2 and
Adjusted R2
Regression Models: CobbDouglas Production Function
and Polynomial Regression
Model

9
(25/07

31/07)

Topic 9: Multiple Regression

Analysis: The Problem of
Inference
Hypothesis Testing in Multiple
Regression
Hypothesis Testing about
Individual Regression
Coefficients
Testing the Overall Significance
of the Sample Regression
Testing the Equality of Two
Regression Coefficients
Testing for Structural or
Parameter Stability of
Regression Models: Chow Test
Prediction with Multiple
Regression
The Troika of Hypothesis Tests:
The Likelihood Ratio (LR),
Wald and Lagrange Multiplier
(LM) Tests
Testing the Functional Form of
Regression: Choosing between
Linear and Log-Linear
Regression Models

10
(01/08

07/08)

Topic 10: Dummy Variable

Tutorial 9
Regression Models
(Topic 9)
The Nature of Dummy Variable
ANOVA Model: Causation in the
Use of Dummy Variable
ANOVA with Two Qualitative

Unit Plan of UBEQ2013 Basic Econometrics

Tutorial 8
(Topic 8)

Mid-term Test
19/07/2016 (Tuesday),
6:15-7:15pm

Reference

Gujarati &
Porter (2009)
(Chapter 8:
page 233-262)

Gujarati &
Porter (2009)
(Chapter 9:
page 277-304)

Week

11-12
(08/08

21/08)

13
(22/08

28/08)

Lecture, Tutorial & Assignment Plan

Lecture Topic
Tutorial /
Continuous
Assignment
Assessment
Variables
Regression with a Mixture of
Quantitative and Qualitative
Regressors: The ANCOVA
Models
The Dummy Variable Alternative
to the Chow test
Interaction Effects Using
Dummy Variables in Seasonal
Analysis
Topic 11: Multicollinearity &
Heteroscedasticity &
Autocorrelation
The Nature of Multicollinearity
Estimation in the Presence of
Perfect Collinearity
Estimation in the Presence of
High but Imperfect
Multicollinearity
Theoretical Consequences of
Multicollinearity
The Nature of Heteroscedasticity
OLS Estimation in the Presence
of Heteroscedasticity
The Method of Generalised
Least Squares (GLS)
Consequences of Using OLS in
the Presence of
Heteroscedasticity
The Nature of Autocorrelation
OLS Estimation in the Presence
of Autocorrelation
The BLUE Estimator in the
Presence of Autocorrelation
Consequences of Using OLS in
the Presence of Autocorrelation
Detecting Autocorrelation
Remedial Measures

Tutorial 10
(Topic 10)
Tutorial 11
(Topic 11)

Topic 12 : Econometric Modelling: Tutorial 12

Model Specification & Diagnostic (Topic 12)
Testing
Model Selection Criteria
Types of Specification Errors

Unit Plan of UBEQ2013 Basic Econometrics

Reference

Submission of Group
Assignment

Gujarati &
Porter (2009)
(Chapter 10:
page 320-350
10/8/2016 (Wednesday) & Chapter 11:
before 5.00pm to
page 365-400)
respective tutor
Gujarati &
Porter (2009)
(Chapter 12:
page 412-452)

Gujarati &
Porter (2009)
(Chapter 13:
page 468-512)
7

Week

14
(29/08

04/09)

Lecture, Tutorial & Assignment Plan

Lecture Topic
Tutorial /
Continuous
Assignment
Assessment
Consequences of Model
Specification Errors
Tests of Specification Errors
Errors of Measurement
Model Selection Criteria

Revision

This Unit Plan is:

Prepared by:

Reference

Revision

Moderated by:

Approved by:

...
(Name: Ms. Tang Siu Eng)
(Name: Mr. Go You How)
(Name: Dr. Lau Lin Sea)
Lead Lecturer
Moderator
Head, Department of Economics
Date:
Date:
Date:
Notes: The information provided in this Unit Plan is subject to change by the Lecturers. Students shall be notified
in advance of any changes.

Unit Plan of UBEQ2013 Basic Econometrics