Question: Suppose that you hypothesize that earnings is explained by a persons education level (EDUC, years of schooling) and experience (EXPER, years in the occupation) but

Suppose that you hypothesize that earnings is explained by a person’s education level (EDUC, years of schooling) and experience (EXPER, years in the occupation)

but that this regression model differs for men and women (FEMALE, 0 = men, 1 =

women).

(a) Write the general equation for a fully interacted model that would test this hypothesis.

(b) Write the null and alternative hypotheses for the Chow test based on this fully interacted model.

(c) Write the reduced model that results from placing the constraints of the null hypothesis on the full model.

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