We want to test whether or not the addition of 3 variables to a model will be st

Question

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. Y=62.42-1.83EX! + 25.62x, SSE-725 SSR-526 The equation was also estimated including the 3 variables. The results are Y- 59.23-1.762Xi +25.638X2+16.23TX3+15.29TX, 18.723x SSE = 520 SSR = 731 Refer to Exhibit 16-6 The value of F- statistic (test statistic) for testing which model has significantly lower SSE is: F=2.497 F-3.6 F-4.55 F= 1.775

Explanation / Answer

TS = ((SSR_r - SSR_ur)/q) / (SSR_ur / (n-k-1))

Here

Q = 3 , k = 5, n = 25

SSR_r = 725

SSR_ur = 520

TS = ((725 – 520)/3 )/(520/(25-5-1)

= 2.4967

option A) is correct

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