The regressions Y = β₀ + β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + ε and Y = β₀ + β₁X₁ + β₂X₂ + ε were run using a sample of 30 observations.The SSE for the first regression is 298.4 and 382.3 for the second regression.Test H₀ : β₃= β₄= 0.

Question

Quizplus · Accepted Answer

The reduction in SSE from 382.3 to 298.4 when adding the variables β13 and β14 suggests that these variables significantly improve the model fit, indicating that the null hypothesis (that these coefficients are equal to zero) should be rejected at a common significance level of α = 0.05.

The Regressions Y = β0 + β1X1 + β2X2

The Regressions Y = β₀ + β₁X₁ + β₂X₂