3 Based on Problem 9.3 Consider the economy and voting exmaple from Section 7.1 Fit the linear regression model to the data through 2012; these are available in the folderElectionsEconomy. Make a...

3 Based on Problem 9.3

Consider the economy and voting exmaple from Section 7.1 Fit the linear regression model to the data through 2012; these are available in the folderElectionsEconomy. Make a forecast for the incumbent party’s share of the two-party vote in a future election where economic growth is 2%.

1. 
   

   (a) Compute the point forecast the standard deviation of the predicted expectation from (9.1), and the standard deviation of the predicted value from (9.2)
   

   
   


2. 
   

   (b) Now compute these using the relevant prediction functions discussed in section 9.2. Check that you get the same values as in (a).
   

   
   


3. 
   

   (c) The formulas used in (a) are for a frequentist approach, meaning no distribution is assumed on the parameters. What are the modelling assumptions used in the functions in (b)?