HELP PLEASE--Regression analysis-Influence shale gas on U.S. Manufacturing sector ---> HELP PLEASE
Hi,
For my bachelor's thesis I must prove through a linear regression the effect of natural gas price on the U.S manufacturing sector.
I want to build a linear regression with U.S natural gas price for the x and a company natural gas expense for the y. So that I can find how the price affect the cost of good sold and more globally earnings of the company.
Therefore I need to find for companies like Dow Chemical, Alcoa, Nucor etc, their yearly expenses on natural gas, which is part of their expenses and fixed cost. I went through their annual reports and try a way to find it but I couldn't.
Does someone know how to find the number so that I can build by linear regression
Many thanks in advance for your answer !
Kind regards,
HH
I may not be of too much help here, but have you tried extrapolating it from their financial statements by figuring out exactly what part of their expenses they allocate nat gas purchases to?
The issue is that you won't see it divided as "variable expense" and "fixed cost" anywhere, since those are internal accounting measures (if even they use that on the inside). You'll have to find out which line item they include that in.
Make sure you read through the 10K and not just the annual report. Hope this helps.
Is this a joke? Oh academia with its constant desire to prove something that's been known for decades and is a common fucking sense.
"Knowing" something and quantitatively proving something aren't the same thing, and if you don't believe that's an important distintion, you're fucked.
Any asshole can claim to "know" anything. Maybe you're smart enough that the shit you personally "know" is correct, but that doesn't mean that everyone is, and however right you are, it sure as shit isn't enough that I believe you. If I tell you I "know" that the yield on AT&T's 7.23 year WAL debenture is going to come in 25 bps Monday, anyone with a fucking brain would ask me how I know that shit. You're going to ask me to prove it before you trade on it, I hope.
No. They would never publish it as it would give competitors and their customers useful information in commercial negation.
The only thing you could try is regressing COGS against all the explanatory variables impacting on COGS ie a wage series, natural gas series, electricity series etc, which if sector specific enough should let you isolate the natural gas impact.
That said, you would need series that closely resemble their cost base (eg wages in the chemical industry) and the chance of omitted variable bias is significant.
Second option. Cogs against wholesale gas prices in $/mwh. Large users pay very close to wholesale. I would seriously look at including other variables though, as its almost guaranteed another cost input will be correlated with gas prices (electricity for example if production switching is possible).
Wait what are the actual equations you are regressing? It sounds like you might have some (serious) issues.
If it were me, I would look at the consumption of natural gas by manufacturing companies as a whole in US. You may be able to find statistics on company size, type are their usage, I believe this data could be found at the EPA website as they do extensive studies.
Thank you for your advices !!!
The goal of my paper is to find the effect of shale gas extraction on the U.S manufacturing sector. I couldn't choose the subject.
I'm a bit lost, therefore just feel free to give advices. Any help is greatly appreciated !!
You are starting this all wrong. You need a CLEAR research question.
What do you mean "what's the impact?" Impact on the price or quantity of the goods they sell? Then you have an endoginatiy issue. Are you including price of shale gas? Is it stationary?
If you wanted to model something like Amount Spent on Gas = Gas Price * beta well that's a very obvious deterministic regression and not one of any interset.
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