N Econometrics a. IA priori, what is the expected relationship between Y and X? Why?
b. Estimate the model given in Eq. (1) for each country.
c. Estimate the model, pooling all of the 81 observations.
d. Estimate the fixed effects model.
e. Estimate the error components model.
f. Which is a better model, FEM or ECM? Justify your answer (Hint: Apply the
Hausman Test).
16.15. Baltagi and Griffin considered the following gasoline demand function:*