Welcome to Econ 420 Applied Regression Analysis. Study Guide Week Six. The F-Test of Overall Significance of Equation. Testing to see if, in general, our equation is any good at all. Step 1: State the null and alternative hypotheses.
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Testing to see if, in general, our equation is any good at all
Step 2: Choose the level of significance; find critical F( pages 316-319, d.f. of numerator =k and d.f. of denominator = n-k-1); state the decision rule
Step 3: Estimate the Regression; find F- Stat (formula on page 56, EViews calculates F-Stat automatically).
Step 4: Apply the decision rule
2. Sometimes the addition of an irrelevant independent variables to the model increases R2
a) Theoretical literature will help you to
a) Overall Quality of estimation
b) Test your hypotheses
2. #17, Page 63
3. #4, PP 81-82
4. #5, Page 82
5. #6, Page 83