Yt = b1 + b2 * Xt
Yt is expenditure on imported goods.
Xt is personal disposable income.
For an econometrics paper, you can see if this relationship holds in the United States. You can use monthly import/export data that be can downloaded at:
The data is in Microsoft Excel format, but you should be able to convert it to any econometrics program you'd like.
You should consider the following issues in your paper:
- How strong is the relationship between personal disposable income and imports?
- Does the value of imports from some country rise faster than imports from other countries?
- Should you use import data from one country? How about combining data from several countries? Should import data from each country be a seperate variable?
- If extra variables are added, how should you deal with the problem of multicollinearity?