We Want to Test Whether or Not the Addition of 3

question 58

Essay

We want to test whether or not the addition of 3 variables to a model will be statistically significant. You are given the following information based on a sample of 25 observations. = 62.42 - 1.836x₁ + 25.62x₂
SSE = 725 SSR = 526
The equation was also estimated including the 3 variables. The results are = 59.23 - 1.762x₁ + 25.638x₂ + 16.237x₃ + 15.297x₄ - 18.723x₅
SSE = 520 SSR = 731
a.State the null and alternative hypotheses.
b.Test the null hypothesis at the 5% level of significance.

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