Question: C13.6 Use CRIME3.RAW for this exercise. (i) In the model of Example 13.6, test the hypothesis H0: 1 2. (Hint: Define 1 1

C13.6 Use CRIME3.RAW for this exercise. (i) In the model of Example 13.6, test the hypothesis H0: 1  2. (Hint: Define 1  1  2 and write 1 in terms of 1 and 2. Substitute this into the equation and then rearrange. Do a t test on 1.) (ii) If 1  2, show that the differenced equation can be written as log(crimei )  0  1 avgclri  ui , where 1  21 and avgclri  (clrprci,1  clrprci,2)/2 is the average clear-up percentage over the previous two years. (iii) Estimate the equation from part (ii). Compare the adjusted R-squared with that in (13.22). Which model would you finally use?

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