Three equations for the course average of ADMS are estimated asfollows. The first equation is for men, and the second equation isfor women. The third equation combines men and women.
??=20.52+13.60?1+0.670?2 n = 406, R2 = 0.4025, SSR =38,781.38
(3.72) (0.94) (0.150)
??=13.79+11.89?1+1.03?2 n = 408, R2 = 0.3666, SSR = 48,029.82
(4.11) (1.09) (0.18)
?=15.60+3.17?+12.82?1+0.838?2 n = 814, R2 = 0.3946, SSR =87,128.96
(2.80) (0.73) (0.72) (0.116)
Where ym = course average for men, yw= course average for women, x1= overall GPA, x2 = ACT score, m = 1 for men.
A. You are to conduct Chow test that the regression equations aresame for men and women:
- 1. State the hypotheses.
- 2. Compute the test statistic
- 3. Based on the computed value above, draw your conclusion (showyour educated guess without the table)
B. With the third equation, test if the dummy variable issignificant.
C. With the two tests conducted above, do you find anyinconsistency? If yes, how can you interpret this outcome?
