esearchers are interested in studying the effects of the smoking habits of mothers on the health of their infants. It has been shown that as more cigarettes are smoked, the infant's birth weight is much lower. A cigarette tax has been introduced in some states to discourage smoking. It is also theorised that more educated parents are less likely to smoke. The model, list of variables and Stata output from the researchers are shown below.

Model

log(bwghtgm) = ₀ + ₁ cigs + ₂ log(cigprice) + ₃ motheduc + ₄ white + u

List of variables

bwghtgm - the infant's birth weight in grams

cigs - the number of cigarettes smoked by the mother during pregnancy

cigprice- the average price of cigarettes in dollars for the mother's home state

motheduc - the number of years of education for the infant's mother

white - a dummy variable that equals one if the infant is white and zero otherwise

Stata Output

If the output below is unreadable on your screen, please clickto download a copy.

. regress log_bwghtgm cigs log_cigprice motheduc white

Source | SS df MS Number of obs = 1,387 -------------+---------------------------------- F(4, 1382) = 13.37 Model | 1.87794101 4 .469485251 Prob > F = 0.0000 Residual | 48.5347764 1,382 .03511923 R-squared = 0.0373 -------------+---------------------------------- Adj R-squared = 0.0345 Total | 50.4127174 1,386 .036372812 Root MSE = .1874

------------------------------------------------------------------------------ log_bwghtgm | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- cigs | -.0043026 .0008627 -4.99 0.000 -.005995 -.0026102 log_cigprice | .0739568 .0638715 1.16 0.247 -.0513388 .1992524 motheduc | .0015219 .0021872 0.70 0.487 -.0027687 .0058125 white | .0562394 .0123866 4.54 0.000 .0319409 .0805379 _cons | 4.126666 .3096158 13.33 0.000 3.519298 4.734033 ------------------------------------------------------------------------------

. estat vif

Variable | VIF 1/VIF -------------+---------------------- motheduc | 1.07 0.937655 cigs | 1.05 0.953685 white | 1.02 0.975932 log_cigprice | 1.02 0.984286 -------------+---------------------- Mean VIF | 1.04

. estat ovtest

Ramsey RESET test using powers of the fitted values of log_bwghtgm Ho: model has no omitted variables F(3, 1379) = 2.70 Prob > F = 0.0444

. estat ic

Akaike's information criterion and Bayesian information criterion

----------------------------------------------------------------------------- Model | Obs ll(null) ll(model) df AIC BIC -------------+--------------------------------------------------------------- . | 1,387 330.6455 356.9727 5 -703.9455 -677.771 ----------------------------------------------------------------------------- Note: N=Obs used in calculating BIC; see [R] BIC note.

Which of the statements is correct for the estimated model? There is more than one correct answer.

	a.	The model has problems with misspecification using the significance level of 5%.
	b.	The severity of the multicollinearity is less than moderate for the independent variables.
	c.	The independent variables are highly collinear. The multicollinearity is severe for the independent variables.
	d.	There is no evidence of model misspecification using the significance level of 5%.