Question 3
A researcher has a set of data with 526 observations on the following variables
- female: if women = 1, 0 otherwise
- exper: work experience
- educ: education level
- wage: current salary
They estimate the following model
wage = Bo+ Bifemale + ẞzeduc + ẞзexper + ẞ4exper2+ u
The researcher suspects that heteroskedastic may be a problem though and wants to test for it using the White test.
a) Write down what the augmented regression for the White test would be in this case.
White
b) The researcher estimates the augmented regression and obtains and R2 value of 0.1427 and critical value is given as 26.22. Use this information to perform the White test. What do you conclude?
