Unformatted text preview: le reason(s) for the test result. (4) Plot the residuals (of the original model) against each of the explanatory variables and comment on them with regard to any sign of violation of the standard assumptions. (5) Test for model misspecification using RESET. (Include both the squared and cubic terms of the predicted dependent variable.) (6) Test for heteroscedasticity using the Koenker variant of the Breusch‐Pagan test. (7) What are the consequences of the result of the test conducted in (6)? (8) Re‐estimate the model using the OLS method but with the White’s heteroscedasticity‐
consistent estimates of the standard errors. Compare th...
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