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Qeustion 32 a) Write the null hypothesis for the Chow test Interpret the results for the Chow test. (5) Chow Breakpoint Test:

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Chow breakpoint test is used here to find that if there is a significant difference in the estimated equations when we fit the sample of data before 1992 and after 1992 separately. Here, 1992 is a breakpoint and hence we separate the data at this point.

Null Hypothesis: The regression coefficients of both the equations are equal i.e a1 = a2, b1 = b2, c1 = c2

k = 3 (indicating three coefficients)
As the statistics are significant, p<0.05 for all, we can reject the null hypothesis indicating that the coefficients are not equal. The equations are different before and after breakpoint.

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