Question: Restricted least squares (RLS). If the dependent variables in the restricted and unrestricted regressions are not the same, you can use the following variant of
Restricted least squares (RLS). If the dependent variables in the restricted and unrestricted regressions are not the same, you can use the following variant of the F test given in Eq. (4.56)
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where RSSr = residual sum of squares from the restricted regression, RSSur = residual sum of squares from the unrestricted regression, m = number of restrictions, and (n - k) = d.f. in the unrestricted regression.
Just to familiarize yourself with this formula, rework the model given in Table 4-4.
(RSS RSS)/m mnk
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