Consider Example 12 4 Compare the two competing models First order yi 0o 1x1 2x2i i, Second order yi 0o 1x1 2x2i 11x21i 22x22i 12x1ix2i i Use R2adj in your comparison in addition to testing H0 11 22 12 0 In addition, use C V discussed in Exercise 12 40

Question: Consider Example 12.4. Compare the two competing models First order: yi = 0o + 1x1 + 2x2i + i, Second order: yi = 0o +

Consider Example 12.4. Compare the two competing models
First order: yi = 0o + β1x1 + β2x2i + ϵi,
Second order: yi = 0o + β1x1 + β2x2i
+ β11x21i + β22x22i + β12x1ix2i + ϵi.
Use R2adj in your comparison in addition to testing H0: β11 = β22 = β12 = 0. In addition, use C.V. discussed in Exercise 12.40.

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