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Consider the following estimated regression with a sample of size n=50. AHE = -2.44 – 1.57 » DFemale + 0.27 - DMarried + 0.59 • Educ + 0.04 • Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. To test whether the conditional variance of the error term has significant changes across individuals,

Consider the following estimated regression with a sample of size n=50. AHE = -2.44 – 1.57 » DFemale + 0.27 - DMarried + 0.59 • Educ + 0.04 • Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. To test whether the conditional variance of the error term has significant changes across individuals,

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.1: Measures Of Center
Problem 9PPS
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Consider the following estimated regression with a sample of size n=50. AHE = -2.44 – 1.57 • DFemale + 0.27 - DMarried + 0.59 + Educ + 0.04 • Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. To test whether the conditional variance of the error term has significant changes across individuals, A. we can apply a White test. B. it is sufficient to look at the pattern. O C. we can apply a Hausman test. D. we can apply a Sargan test.
Transcribed Image Text:Consider the following estimated regression with a sample of size n=50. AHE = -2.44 – 1.57 • DFemale + 0.27 - DMarried + 0.59 + Educ + 0.04 • Exper, where AHE indicates average hourly earning of the individual, DFemale is a dummy variable indicating gender, DMarried is a dummy variable indicating marital status, Educ indicates the individual's education level, and Exper the level of work experience. A plot of the squared residuals against the fitted values of AHE is shown in the following figure. To test whether the conditional variance of the error term has significant changes across individuals, A. we can apply a White test. B. it is sufficient to look at the pattern. O C. we can apply a Hausman test. D. we can apply a Sargan test.
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