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Unformatted text preview: Step 5: Using all the new variables created in step 3 and 4, estimate a regression model with them as independent variables and the original dependent variable as independent variable. Step 6: Calculate the fitted ln st2 (create a new variables called FIT by using feature FIT in Storage when running regression model in step 5 to create a new variable LNST). Step 7: Calculate st2 by taking the anti log of ln st2 (create new variables STSQ by using EXPO(FIT)) Step 8: Obtain EGLS by dividing each original independent variables with STSQ to create 5 new variables. Step 9: Using the five new variables from step 8, we estimate a regression model....
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- Spring '08