Test Analysis : 5.5 Hetroskedasticity Test

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5.5 Hetroskedasticity Test
Heteroskedasticity test is also done for the model I and the results look like seen below in Table 5.12. Since the Obs*R2 value of 8.092 is less than the 5% critical X2 value of 11.07, the null hypothesis that assumes unavailability of heteroskedasticity can’t be rejected. That implies that the standard errors, T-statistics and F-statistics can be considered valid.
Table 5. 12 White Heteroskedasticity Test Result for Model I

F-statistic 1.410 Probability 0.250
Obs*R-squared 8.092 Probability 0.231

The result of heteroskedasticity test done for Model II is also shown in Table 5.13 below. The null hypothesis of no heteroskedasticity cannot be rejected this time too. This result is the same as the preveous model’s result and the post-regression test results are valid.
Table 5. 13 Heteroskedasticity Test Result for Model II

F-statistic 0.714 Probability 0.722
Obs*R-squared 9.893 Probability 0.625

5.6 T test for Coefficient Significance
The government expenditure variables were hypothesized to have a positive effect on GDP of the country. This implies that the coefficients on those independent variables are expected to be positive and a one-tailed test is appropriate.
For Model I, the T-test results (Table 5.14) showed that log(RE) and log(CE), which represent recurrent and capital expenditure respectively are relevant variables while foreign aid is not.
Table 5. 14 Result of T test for

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