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Which of the following statements is true'? V We would reject the null hypothesis if the sum of squared residuals (SSR) from the unrestricted regression
Which of the following statements is true'? V We would reject the null hypothesis if the sum of squared residuals (SSR) from the unrestricted regression is sufciently smaller than that from the restricted regression. We would fail to reject the null hypothesis if the sum of squared residuals (SSR) from the restricted regression is sufficiently smaller than that from the unrestricted regression. In a restricted regression, the alternative hypothesis is allowed to be true. In an unrestricted regression, the null hypothesis is forced to be true. A statistics student wants to study the factors which affected the sale of Ben & Jerry's ice creams (S) across the world on last year's National Ice Cream Day. He selects three factors the average price of the ice creams sold in that region (P), the average temperature on that day in that region (T), and the regional expenditure on advertising their ice cream in the week leading to that day (E). For his study, he selects a random sample of 110 stores and estimates the following regression function: g = 3.75 - 0.45P+ O.60T+ 0.70E, R'2 = 0.45. By imposing restrictions on the true coefficients, the student wishes to test the null hypothesis that the coefficients on Tand E are jointly 0 against the alternative that atleast one of them is not equal to 0, while controlling for the other variables. So, the restricted regression equation is: s = 3.75 0.45P, R2 = 0.40. The homoskedasticityonly Fstatistic value associated with the above test is (Round your answer to two decimal places.) At the 5% significance level. the student will V the joint null hypothesis
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