A Researcher Is Trying to Decide Whether or Not to Add

question 31

Essay

A researcher is trying to decide whether or not to add another variable to his model. He has estimated the following model from a sample of 28 observations:
​ $\widehat { y }$ = 23.62 + 18.86x₁ + 24.72x₂
​
SSE = 1,425 SSR = 1,326
​
He has also estimated the model with an additional variable x₃. The results are
​ $\widehat { y }$ = 25.32 + 15.29x₁ + 7.63x₂ + 12.72x₃
​
SSE = 1,300 SSR = 1,451
​
What advice would you give this researcher? Use a .05 level of significance.