Apply quantitative analysis techniques particularly predictive analytics to an empirical study relating real GDP to physical capital and
effective labor. The project requires students to analyze problems, recommend a solution, and
compose a written report.
Describe the relationship between real GDP and factors that affect it.
Develop a regression model to analyze the relationship between real GDP and a set of
Collect relevant data from a selected country(see list below) and apply data analytics to
empirically describe the relationship; create visualizations and tell a story.
Use the different values of the explanatory variables to real GDP.
Draw informed conclusions
Task 1 – Data Cleaning
The data is not provided in a suitable state. It is necessary to get the data into a proper format that
supports your analysis. You are required to prepare the data for the analysis – clean the data,
reconcile and make it ready for analysis using Excel, SPSS or Tableau.
Task 2 – Data Visualization
You will also create various visualizations using Excel or Tableau.
Task 3 – Predictive Analytics
Develop and estimate a multiple regression model to determine the relationship between real
GDP, physical capital and effective labor. The following equation will be estimated.
𝑌𝑡 = 𝐴𝐾𝑡
𝑙𝑛𝑌𝑡 = ln 𝐴 +∝ 𝐾𝑡 + 𝛽𝐿𝐻𝑡 + 𝜀𝑡
Y is the real GDP
K is physical capital
L is raw labor,
H is the index of human capital,
LH is the effective labor.
ε is the random error.
You will determine the nature of the production process by determining the magnitude of ∝ + 𝛽.
If ∝ + 𝛽 = 1, then constant returns to scale.
If ∝ + 𝛽 > 1, then increasing returns to scale
If ∝ + 𝛽< 1, then decreasing returns to scale.
Also, you can determine the return to education by estimating
𝑌𝑡 = 𝐴𝐾𝑡
𝑙𝑛𝑌𝑡 = ln 𝐴 +∝ 𝐾𝑡 + 𝛾𝐿𝑡 + 𝜖𝑡
And then calculating
𝛽 − 𝛾.
It may be a good idea to compare an advanced country and a poor country.
Description of variables
Variable name Variable definition
Emp (L) Number of persons engaged (in millions)
Hc (H) Human capixtal index, based on years of schooling and returns to
Rgdpna (Real GDP) Real GDP at constant 2011 national prices (in mil. 2011US$)
Rnna (K) Capital stock at constant 2011 national prices (in mil. 2011US$)
Task 4 – Report
Write a paper to present your analysis and results which will enable governments to make sound
decisions on how to increase GDP. Use the organization and timeline provided below to
complete the project.
Each project should be at least 5 pages excluding title page, cover page and references. The
project will be organized as follows:
• Title page (Include project title and your name) (5%)
• Introduction: Problem of the propose study, purpose and justification of the study (10%)
• Data analytics – various calculations and estimations (50%)
• Interpretation of results (15%)
• Findings and conclusion. (10%)
• Appendices: Tables and Figures. (5%)
• References (5%)
The project will be written using the APA style. (https://apastyle.apa.org/index)
Activity Feb. 26-28 March. 10-20 March 21-27 April 10-25
Badge for Big
Discussion on the
Appendix: Selected countries
12 United Kingdom
25 New Zealand
29 Saudi Arabia
34 United States