Econometrics theory and application

Derive summary statistics on the TFR and GNP using the “Total Fertility Rates and Income” data.
What is the mean TFR in 1980?
What is the mean TFR in 2009?
Is the mean TFR significantly different between the two years? Use a test of the difference between means at the p=.05 significance level to answer this last question,­ and state your test statistic.
Consider the following simple OLS regression model:
Now estimate the simple OLS regression model in Question 2, USING EXCEL(the excel spreadsheet we used for the API and FLE model would be a good template for doing this), and use it to answer the following questions:
Over time, other things that affect fertility may change. For example, women become more educated, and this may have an effect on women’s willingness to have children that is independent of income. Does knowing this change the way you feel about the reliability of your OLS estimates? Why or why not?
How might you use the “year” variable to control for other variables that might be affecting fertility over time? Please write the equation of the model only.
Using EXCEL, please estimate a multiple regression model that controls for changes in fertility over time, independent of income. (That is, add a year variable to your model.)
Report the estimated coefficient on your time variable, and explain what it means.
Is your econometric estimate of the effect of income on fertility unchanged? Why or why not?
Which does a better job of explaining the variation in total fertility around the world mean, the simple or multiple regression model? Explain.
Please use your model in Question 5 to predict the TFR for Spain in 2009. Is your model a good predictor of Spain’s TFR in 2009? Why or why not?
Now use your model in Question 5 to predict the TFR for China in 2009. Is your model a good predictor of China’s TFR in 2009? Why or w not? If not, why do you suppose your model is not a good predictor of TFR in China?
What might a better model to predict fertility look like, if you could get data on any additional variables at the country level? Be sure to explain the THEORY behind including these new variables in your analysis.