Lab Eight Lab Eight Econ 240C Econ 240C
Lab Eight Econ 240C. Per Se Legislation Introduced in Great Britain in October 1967 Before driving dangerously while intoxicated led to a conviction only.
Dec 19, 2015
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Lab EightLab Eight
Econ 240CEcon 240C
Per Se LegislationPer Se Legislation
• Introduced in Great Britain in October 1967
• Before driving dangerously while intoxicated led to a conviction only if you were found guilty in court
• After October 1967, if your blood alcohol content, BAC, was 0.08 or greater you were per se guilty
Capturing an event with a step functionCapturing an event with a step function
200
400
600
800
1000
60 62 64 66 68 70 72 74
0.0
0.2
0.4
0.6
0.8
1.0
60 62 64 66 68 70 72 74
No visual impact
Two Approaches to Seasonal DataTwo Approaches to Seasonal Data
• Regression of kill(t) = a –b*step(1967.10) + seasonal dummies + e(t)
Regression with Seasonal dummiesRegression with Seasonal dummies
Actual, fitted, residualActual, fitted, residual
-300
-200
-100
0
100
200
300
200
400
600
800
1000
60 62 64 66 68 70 72 74
Residual Actual Fitted
Actual, fitted, residualActual, fitted, residual
-200
-100
0
100
200
200
400
600
800
1000
62 64 66 68 70 72 74
Residual Actual Fitted
0
5
10
15
20
25
-160 -120 -80 -40 0 40 80 120 160
Series: ResidualsSample 1960:04 1975:12Observations 189
Mean 6.68E-09Median -3.352202Maximum 169.0330Minimum -166.0877Std. Dev. 43.97311Skewness 0.177571Kurtosis 4.364645
Jarque-Bera 15.65850Probability 0.000398
The Alternative ApproachThe Alternative Approach
• Box Jenkins– Seasonal difference instead of seasonal
dummies
Model:
Kill(t) c ar(1) ar(2) ar(3) step
(1-Z12) Kill(t) c ar(1) ar(2) (1-Z12) step(1967.10)
Sdkill(t) c ar(1) ar(2) sdstep(1967.10)
Seasonal differenceSeasonal difference
-300
-200
-100
0
100
200
-400
-200
0
200
400
62 64 66 68 70 72 74
Residual Actual Fitted
Residual is White NoiseResidual is White Noise
0
5
10
15
20
25
-160 -120 -80 -40 0 40 80 120 160
Series: ResidualsSample 1961:03 1975:12Observations 178
Mean 1.888725Median 0.375867Maximum 162.6580Minimum -156.3048Std. Dev. 46.53823Skewness 0.113472Kurtosis 3.510213
Jarque-Bera 2.312674Probability 0.314637
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