Prof. Angela D. Nalica
School of Statistics Faculty
University of the Philippines, Diliman
In Partial Fulfillment of the
Statistics 136: Regression Analysis
Mary Ann A. Boter
Michael Daniel C. Lucagbo
Krystalyn Candy C. Mago
April 9, 2009
The level of a country’s imports measures its participation and competitiveness in the international market. As such, it is important to identify economic indicators that affect the level of imports. Economic theory rarely presents imports as a response variable. It appears very frequently, however, as a predictor in formulas that model a multitude of variables, supporting the fact that it is highly related with other economic variables. The paper aims to construct a model with imports as the response variable and choose those independent variables that affect it significantly.
The results of the study confirm the significance of GDP and labor force size in predicting imports. These were the two main variables that had been potentially significant even as theory describes them to be. Another economic measure, budget revenue, turned out to be a good predictor for imports. The final model expresses imports as a function of GDP, labor force size and budget revenue.
All countries are linked to the rest of the world through trade. Presence of trade means that some of a country’s domestically-produced goods are exported to other countries. It also means that countries purchase needed goods not available locally. The amount of goods a country purchases from other countries is, by definition, the level of its imports. Imports, being indicative of a country’s participation and competitiveness in international trade, is an important economic variable. However, imports is not commonly expressed as an endogenous variable (that is, a dependent variable in an economic... [continues]
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