**
POLS 6482 ADVANCED MULTIVARIATE STATISTICS
Fourth Assignment
Due 1 October 2001**

**
This Homework assumes that you have read Chapters I and II of the Epple Notes!**

- This problem is a continuation of the party identification problem that
was part 1 of the 2
^{nd}Homework Assignment. - Compute the correlation matrix for the variables
**education**,**income**, and**age**for both the 1968 and 1996 datasets. Interpret the changes in the correlations between 1968 and 1996. Do the changes make sense to you? Why? Why not?

- Find the eigenvalues and eigenvectors of the correlation matrix for
both 1968 and 1996. Use the method shown in 3.b. of the 2
^{nd}homework. - This problem is a continuation of 1.c of the 3
^{rd}homework. Bring up the**EVIEWS**version of HDMG105X.DTA from the 3^{rd}homework. Run the regression:

**LS clint96 C black south hisp income rep**

and save the residuals by copying them to another vector; namely:

**genr clintresid=resid**

- Compute the correlation matrix between
**clintresid**,**black**,**south**,**hisp**,**income**, and**rep**. What should the values of the correlations between**clintresid**and the other variables be? Why? - In
**EVIEWS**you can generate the fitted values of the dependent variable (the y-hats) with the**forecast**command. For the regression above:

**forecast clintyhat**

and**EVIEWS**puts the y-hats into the vector**clintyhat**. (In**Stata**the corresponding command is**predict clintyhat**.) Calculate the correlation between**clintyhat**,**clintresid**,**black**,**south**,**hisp**,**income**, and**rep**. What should the values of the correlations between**clintyhat**and the other variables be? Why? - In
**EVIEWS**use the**HIST**command on**clintresid**. What famous probability distribution does the histogram look like? - In
**EVIEWS**use the**SCAT**command to get scatterplots of**clintresid**versus**black**,**hisp**, and**income**. The syntax of the command is:

**scat black clintresid**

which makes**black**the "x" axis and**clintresid**the "y" axis of the scatterplot. Do these scatterplots look random to you? - In
**EVIEWS**run the regression:

**LS clint96 C clintresid**

Compare the coefficients and r-square to the original regression. Explain the values of the coefficients. Explain the value of the r-square.

- Compute the correlation matrix between