Food expenditure in India. In the following table we have given data on expenditure on food and total expenditure for 55 families in India.

a. Regress expenditure on food on total expenditure, and examine the residuals obtained from this regression.

b. Plot the residuals obtained in (a) against total expenditure and see if you observe any systematic pattern.

c. If the plot in (b) suggests that there is heteroscedasticity, apply the Park, Glejser, and White tests to find out if the impression of heteroscedasticity observed in (b) is supported by these tests.

d. Obtain White€™s heteroscedasticity-consistent standard errors and compare those with the OLS standard errors. Decide if it is worth correcting for heteroscedasticity in this example.

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Food Total Food Total Observation Expenditure Expenditure Observation Expenditure Expenditure 390.0000 217.0000 382.0000 388.0000 29 655.0000 196.0000 30 385.0000 662.0000 303.0000 391.0000 31 470.0000 663.0000 270.0000 415.0000 32 322.0000 677.0000 680.0000 325.0000 456.0000 33 540.0000 260.0000 460.0000 472.0000 478.0000 494.0000 516.0000 525.0000 554.0000 575.0000 34 433.0000 690.0000 300.0000 325.0000 336.0000 345.0000 325.0000 362.0000 35 36 37 38 39 40 295.0000 340.0000 500.0000 450.0000 415.0000 540.0000 695.0000 695.0000 695.0000 720.0000 721.0000 730.0000 8. 9. 10 11 13 315.0000 41 360.0000 731.0000 14 355.0000 579.0000 42 450.0000 733.0000 585.0000 15 325.0000 43 395.0000 745.0000 16 370.0000 586.0000 44 430.0000 751.0000 17 390.0000 590.0000 45 332.0000 752.0000 18 420.0000 608.0000 46 397.0000 752.0000 610.0000 19 410.0000 383.0000 47 446.0000 769.0000 20 616.0000 618.0000 623.0000 627.0000 630.0000 635.0000 640.0000 648.0000 650.0000 48 480.0000 773.0000 21 22 23 24 25 26 315.0000 267.0000 420.0000 300.0000 410.0000 220.0000 403.0000 350.0000 49 50 51 52 53 54 55 352.0000 410.0000 380.0000 610.0000 530.0000 360.0000 773.0000 775.0000 785.0000 788.0000 790.0000 795.0000 801.0000 27 305.0000 28 2344