Use the data in FERTIL1 .RAW for this exercise.
(i) In the equation estimated in Example 13.1, test whether living environment at age 16 has an effect on fertility. (The base group is large city.) Report the value of the F statistic and the p-value.
(ii) Test whether region of the country at age 16 (South is the base group) has an effect on fertility.
(iii) Let u be the error term in the population equation. Suppose you think that the variance of u changes over time (but not with educ, age, and so on). A model that captures this is
u2 = (0 + (1 y74 + (2y76 + ... + (6y84 + v.
Using this model, test for heteroskedasticity in u. (Your F test should have 6 and 1,122 degrees of freedom.)
(iv) Add the interaction terms y74-educ, y76educ, y84educ to the model estimated in Table 13.1. Explain what these terms represent. Are they jointly significant?