ECON 300

February 3, 2025

Degrees of freedom = T minus 1

February 10, 2025

• Assignment due this Friday

• Econometrics/Graphing Assignment

February 18, 2025

• Research question: How do rising interest rates affect consumer demand for auto loans and new vehicle purchases? 

• Model: MC increases, MB decreases

  • Marginal Benefit decreases because each additional unit consumed provides less value to the consumer.

    • As consumers consume more of a good, the additional satisfaction (benefit) from each extra unit decreases, following the law of diminishing marginal utility.

  • Marginal Cost increases because each additional unit becomes more expensive to produce as resources get stretched.

    • As production or consumption increases, each additional unit costs more to produce due to factors like limited resources, inefficiencies, and higher input prices.

• Dependent variables: Auto loan demand, new vehicle purchases

• IV: Interest rates

  • household income

  • unemployment rate

  • price of new cars

  • terms of loan currently offered

  • prices of gas

  • Credit Score

• X - Axis is quantity

• y-axis is demand of auto loans

March 10, 2025

• For presentation next class:

  • Need to show dependent variable, explanatory variable, Control Variables

  • Y = [Constant variable] + B₁X₁ + B₂X₂ + [Error variable]

  • Main question for presentation: What is your unit of time/observation?

• For Excel:

  • Each row is an observation [Check Sachs(1) Excel Sheet in Data section on Canvas]

    • County level data: Each row is a county

      • First color would be name for country

    • Time Series Data: Each row is a unit of time

      • Could be annually, daily for stock market, quarterly.