[All Steps] We start off with a regression of Y on X2 and X3 and then consider adding variables X4, X5 and X6. To help decide whether to add these extra
Question: We start off with a regression of \(Y\) on X2 and X3 and then consider adding variables X4, X5 and X6. To help decide whether to add these extra variables, we decide to do a formal test. STATA output is below.
- What do we call this test?
- Write down the null and alternative hypotheses.
- Explain in your own words what these hypotheses mean.
- Perform the test at 5% .
- State your conclusion making sure you explain what your conclusion means and which of the 2 models you prefer.
- Explain why the degrees of freedom are what they are for this test.
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Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document 