i)Apply RESET from equation to the model estimated in Computer Exercise. Is there evidence of functional form misspecification in the equation?
(ii) Compute a heteroskedasticity-robust form of RESET. Does your conclusion from part (i) change?
y = β0+ β1x1+… + βkxk+δ12 + δ23+error.
In Problem 4.2, we added the return on the firm’s stock, ros, to a model explaining CEO salary; ros turned out to be insignificant. Now, define a dummy variable, rosneg, which is equal to one if ros _ 0 and equal to zero if ros _ 0. Use CEOSAL1.RAW to estimate the model
Discuss the interpretation and statistical significance of3.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.