Take Home Assignment Part-III

Attention to HRM 16-18 Batch of Applied Econometrics for HRM

Step 1:
As a part of the course and concurrent Assignment in Econometrics, extend the first or
second assignment (assignment-1 or 2) by including some more variables which you
think have a sound theoretical relationship. The number of independent variables should
not be less than three (more is preferable).

Step 2:
Collect the data pertaining to each variable relating to Indian context. The number of
observation for each data set should not be less than 30 observations. No two students
will select the same variables.

Step 3:
Estimate a multiple linear regression model and calculate the following things and
interpret the result with sound theoretical logic.

a) Test the Multicollinearity problem with a suitable method. Solve the problem of
Multicollinearity if so, by any one of the method which you thing suitable for
your example?
b) Applying a suitable method test the Heteroscedasticity problem. Solve the
problem of heteroscedasticity, if so, by any one of the method which you thing
suitable for your example?
c) Tests whether autocorrelation is present or not in your regression? Solve the
problem of autocorrelation, if so, by any one of the method which you thing
suitable for your example?
d) Perform the redundant variable or omitted variable tests to test about the inclusion
or exclusion of a variable into the model.

(Note: Even if your model does not suffer from any of these model, for the sake of
assignment, perform the test and provide the solution for the possible problem).
Please note

1. All the estimation has to be done applying Eviews or ay software you are
familiar with you software.

2. The Last date of submission is Aug 12, 2017 or before 4:30 p.m. Submit a hard
copy to Ms Shreen Aktar, TMDC building and mail me a soft copy in
pcpadhan@xlri.ac.in email id. This will not be further extended.