Theory also suggests a relationship-arithmetic average

Reference no: EM13690151

Using the file FARM.csv. Construct the variable Q = (PBARL*QL + PBARC*QC + PBARO*QO)/10 where PBARL, PBARC and PBARO are the arithmetic averages of PL, PC and PO respectively. The arithmetic average of Q is 69422. Economic theory also suggests a relationship of the form: Model B: ln Q = b1 + b2*t + b3*ln ZD + b4*ln XK + b5*ln XL + b6*ln XA + b7*ln XM + e where E(e) = 0. A researcher suspects that Var(e) = exp(a1 + a2*t + a3*ln ZD + a4*ln XK + a5*ln XL + a6*ln XA + a7*ln XM). Conduct a Breusch-Pagan test of the null hypothesis of homoskedasticity against this alternative. The value of the test statistic is Blank 1. If the null hypothesis is true then the test statistic follows a chi-squared distribution with Blank 2 degrees of freedom (report the d.o.f. as an integer). The researcher should Blank 3 (reject/not reject) the null hypothesis. Use a 5% level of significance.

Reference no: EM13690151

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