Questionnaire on Mobile Operator

In: Other Topics

Submitted By saheed
Words 10671
Pages 43
A casual look at the published empirical work in business and econometric will reveal that many economic relationships are of single –equation type. In such models, one variable (the dependent variable Y) is expressed as a linear function of one or more other variables (the explanatory variables, the X’s). An implicit assumption is that the cause and effect relationship, if any , between Y and X’s is unidirectional. The explanatory variables are the cause and the dependent variable is the effect .
However, there are situations where there is a two- way or simultaneous relationships between Y and some of the X’s which makes the distinction between the dependent and the explanatory variables of dubious value. It is better to lump together a set of variables that can be determined simultaneously by the remaining set of variables- precisely what is done in simultaneous equation models. In such models, there is more than one equation - one for each of the mutually or jointly dependent or endogenous variables. And unlike the single equation models, in the simultaneous equation models, one may estimate the parameters of a single equation without taking into account information provided by the other equation in the system. In a simultaneous equation system, variables that appear only on the right – hand side of the equation are called exogenous or predetermined variables. They are truly independent or non-stochastic because they remain fixed. Variables that appear on the right-hand side and also used to express the equations are referred to as endogenous variables. Unlike exogenous variables, endogenous variables change value as the simultaneous system of the equation grinds out equilibrium solution. They are endogenous variables because their valuables are determined within the system of the equations.
As a consequence of the endogenous…...

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