Discuss the results of the RESET test for all three models

Assignment Help Applied Statistics

Reference no: EM132334416

Assignment -

Instructions: The dataset "airfare1.dta" can be obtained from the moodle site. The primary goal of the report is to model the average one-way fare.

Task 1 - Write a very brief introduction to what will be done in this report.

Task 2 - Report and discuss summary statistics (such as min, mean, medial, and max) for all variables.

Task 3 - Estimate a simple regression model

fare = β₀ + β₁dist + u, (1)

report the estimation results and discuss magnitudes and significance of the estimated coefficients. What is the effect of distance on the fare? Discuss if this makes sense given the summary statistics reported in Task 2.

Task 4 - Estimate a regression model with quadratics

fare = α₀ + α₁dist + α₂dist² + w, (2)

Task 5 - Estimate the following regression model

fare = γ₀ + γ₁dist + γ₂dist² + γ₃passen + v, (3)

report the estimation results and discuss magnitudes and significance of the estimated coefficients. What is the effect of distance on the fare? What is the effect of average passengers per day on the fare? Discuss if that makes sense given the summary statistics reported in Task 2.

Task 6 - Perform and discuss the results of the RESET test for all three models.

Task 7 - Perform and discuss the results of the test for heteroskedasticity for all three models.

Task 8 - Write a very brief conclusion about what has been done in this report.

Task 9 - Include Stata do file as an appendix (just copy and paste).

Attachment:- Dataset.rar

Reference no: EM132334416

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