View the step-by-step solution to:

The le br2.dta contains data on 1080 houses sold in Baton Rouge, Louisiana, during mid-2005.

The le br2.dta contains data on 1080 houses sold in Baton Rouge, Louisiana, during

mid-2005. We will be concerned with the selling price (PRICE), the size of the house

in square feet (SQFT), and the age of the house in years (AGE). Dene a new variable

that measures house size in terms of hundreds of square feet, SQFT100=SQFT/100.

(a) (10 points) Estimate the following equation and report the results:

ln(PRICE) = b1 + b2SQFT100 + b3AGE + b4AGE2 + e "

(b) (90 points) Compare the log-linear model above with the following linear model:

PRICE = b1 + b2SQFT100 + b3AGE + b4AGE2 + e"

[HINT: Look at the residual plots, the JB tests and the R-squared. You may need to refer to exercise 4.14]. Which model would you chose?


Please make sure you do not use the sk command in STATA instead of the JB test as the sk test is a different test of normality (not the JB test). You need to compute the JB test statistic by hand, using the numbers from your STATA output.




i just want the answer for question 2. thanks

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question