Heteroskedasticity and Instrumental Variables Economics Assignment Help

Assignment Task

Heteroskedasticity
1.Estimate a regression in which rent is explained as a function of average housing value (hsngval), housing growth (hsnggrow) and controls for region. What is the average difference in rent between the West and South regions after controlling for the effects of housing value and housing grow?
2.Test that the effects of the region variables are jointly significant in the regression in problem 1. Recall that SAS provides you a convenient method of performing F-tests using the test command as we did on problem set 4. For this problem, however, in addition to using the test statement to test the joint significance of the regions, I would like you to duplicate the test by also estimating the restricted regression (omitting the regional variables), capturing the sum of squared residuals and then obtaining the sum of squared residuals from the unrestricted regression. Calculate the F statistic by hand (using your regression output) as we discussed in class and be sure to show me your work.
3.Perform a White test for heteroskedasticity and obtain the heteroskedasticity robust standard errors. Note: both of these can be obtained as options in the model statement. For example, typing model Y = X / white spec; will provide the heteroskedasticity consistent standard errors as well as performing the White test (spec). Do you find evidence of heteroskedasticity?

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