A study of vacation expenditures in relation to income was based on data for 256 households, which were grouped into three separate income classes. Log linear regressions (with an intercept term) were computed for each income group and for all households with the following
Results:
Household
Income
Regression
Slope
Residual
Variance
Number of
Households

Low income	0.02	0.42	102
Middle income	0.09	0.46	102
High income	0.14	0.57	52
All households	0.07	0.48	256

Test whether the expenditure function is the same for all income groups.
Please note that
Approximate critical values of F(4, 250)
10% in right tail 1.97

5% 1%

2.41 3.40

Answer rating: 100% (QA)

Answer The Ftest is used to test the hypothesis that the slope of the expenditure function is the same for all income groups The null hypothesis is that the expenditure function is the same for all in... View the full answer