/* x = average index of central bank independence (1 = little independence
4 = very independent)
y = average Inflation 1955 - 1988
Source: Alesina and Summers (1993) Jo. of Money,
Credit, and Banking */
data in;
input x y;
cards;
1.5 8.5
1 7.6
2 6.4
1.75 7.3
2 6.7
2 6.1
2.5 6.5
2 4.1
2 6.1
2 6.1
2.5 4.5
2.5 4.2
2.5 4.9
3.5 4.1
4 3
4 3.2
;
proc means data=in;
var x y;
run;
proc reg data = in;
model y = x / r clm cli;
run;
/* Here we use the transformed model to obtain the point
prediction when x = 1.50 (it is the estimate of the intercept
in the transformed model) and the ingredients for the construction
of the standard error of the prediction error. We use the
Standard Error of the Transformed Regression (RMSE in SAS) or the Mean
Square of the Error in the ANOVA table) to construct the standard error of the
prediction error. se(prediction error) = sqrt(RMSE^2 + se(intercept)^2)=
sqrt(mean square error + se(intercept)^2). */
data in;
set in;
xstar = x - 1.50;
proc reg data=in;
model y = xstar;
run;