Use the data in DISCRIM to answer this question. (See also Computer Exercise C8 in Chapter 3.)

(i) Use OLS to estimate the model log1psoda2 5 b0 1 b1prpblck 1 b2log1income2 1 b3prppov 1 u, and report the results in the usual form. Is b^

1 statistically different from zero at the 5% level against a two-sided alternative? What about at the 1% level?

(ii) What is the correlation between log(income) and prppov? Is each variable statistically significant in any case? Report the two-sided p-values.

(iii) To the regression in part (i), add the variable log(hseval). Interpret its coefficient and report the two-sided p-value for H0: blog1hseval2 5 0.