The following regression model was fitted to 30 observations:

where
ŷ = Temperature (°F)
x₁ = Cloud cover (%)
x₂ = Humidity (%)
x₃ = Wind (mph)

The numbers below the coefficients are the coefficient standard errors.
a. When the independent variable of cloud cover had been taken out from the model, the R² = 0.679. Justify this statement.
b. Test at the 1% level the null hypothesis, all else being equal, for the significance of the coefficient on x₁.
c. Determine whether the model has uniform variance over the predicted values at the 5% significance level.
d. Besides the method used in part c., what other method can be used in detecting heteroscedasticity? Explain how.

Transcribed Image Text:

ŷt = 47 + 0.7894x₁ + 0.0394x2+ + 0.6431x3t (0.254) (0.0157) (0.296) R² = 0.874