Econ103_Lec7 (2012_12_16 01_29_32 UTC)

regress famincsc he we kl6 yhat2 test yhat2 we reject

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Unformatted text preview: 0: The func:onal form of the model is adequate. First we need to recondi:on the data by scaling faminc by 10000. gen faminc_sc =faminc/10000! regress faminc_sc he we kl6! predict yhat! gen yhat2 = yhat^2! gen yhat3 = yhat^3! summarize faminc_sc faminc he we kl6 yhat yhat2 yhat3 ! 14 RESET 2 of 5 summarize faminc_sc faminc he we kl6 yhat yhat2 yhat3 ! 15 2.  Es:mate the original regression with yhat2 added to the model and test yhat2’s significance.! regress faminc_sc he we kl6 yhat2 test yhat2 ! ! We reject H0. Therefore, the original func:onal form is not adequate to model this rela:onship. 16 2.  Es:mate the original regression with yhat2 and yhat3 added to the model and test yhat2’s and yhat3’s significance.! regress faminc_sc he we kl6 yhat2 yhat3 ! test yhat2 yhat3! We reject H0. Therefore, the original func:onal form is not adequate to model this rela:onship. 17 RESET 5 of 5 3.  Use STATA’s built in func:on estat ovtest following a regression to do a RESET(3) test. regress faminc he we kl6! estat ovtes...
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