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The following regression model was estimated: MGE=B + B *F; + B *IncF + B3-IncM + B Kids + u . regress MGE Fem

The following regression model was estimated: MGE=B + B *F; + B *IncF + B3-IncM + B Kids + u . regress MGE Fem Income Kids Source Model Residual Total MGE Fem Income Kids cons SS 9384250.34 935846.647 10320097 df 3 96 Coef. Std. Err. 99 104243.404 -18.82633 .1054287 150.5908 5.394069 218.4368 64.60441 20.13306 .0099582 MS 3128083.45 9748.40257 Number of obs. F(3, 96) Prob > F R-squared Adj R-squared Root MSE = -0.94 0.352 -58.79013 10.59 0.000 .0856618 27.92 0.000 139.8837 3.38 0.001 90.1981 100 320.88 0.0000 0.9093 0.9065 98.734 t P>|t| [95% Conf. Interval] 21.13747 .1251957 161.298 346.6756 2. Finally, we discussed how to estimate the model with the restriction: MPC; = 2*MPCM To do this, we created the new variable: IncTotal = 2* Inc + Inc The two comes from the assumption about the MPC's We then estimated this restricted model and compared it to the unrestricted model in a) to test the null hypothesis that this restriction is correct. Suppose we wanted to estimate and test: MPC, = 1.5*MPCM In this case: IncTotal = 1.5*Incr + Inc wwwwwwwwww a) b) Estimate the model with this restriction. < Test the null hypothesis that MPC = 1.5* MPCM. Use a .05 level of significance.

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