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Suppose I am thinking about figuring out how much my rent will be given my income. I have gathered data on Washington, DC apartment rents
Suppose I am thinking about figuring out how much my rent will be given my income. I have gathered data on Washington, DC apartment rents (\$/Year) and the incomes of the people who live in those apartments (\$/Year), as well as the square footage of the apartment and whether it has an unobstructed view (Dummy Variable). Two regressions have been run and the results are reported in the table below. The variables in the first row signify what the dependent variable is for each regression run. Consider model (2). Here the dependent variable is the square of the residuals from the model (1). You could implement the Breusch-Pagan test to test for heteroskedasticity. Perform this test, what is your conclusion? Reject at 5% significance level. Fail to reject at 5% significance level. cannot be determined. Reject at 1% significance level
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