Does model C violate an important assumption? If so, which one? O Model C has omit variable bias. Model C violates the assumption of no perfect collinearity Model C violates the zero conditional mean assumption. Model C has multicollinearity issue.

MATLAB: An Introduction with Applications
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MODEL C
Dependent Variable: PSODA
Method: Least Squares
Sample: 1410
Included observations: 391
Variable
Coefficient
Std. Error
t-Statistic
Prob.
C
0.587703
0.031288
18.78366
0.0000
PRPBLCK
0.036566
0.019134
1.911017
0.0567
INCOME
-1.09E-07
2.68E-07
-0.405990
0.6850
BK
0.066577
0.009123
7.297549
0.0000
KFC
0.038109
0.010344
3.684257
0.0003
RR
0.083831
0.010898
7.692683
0.0000
NJ
0.042735
0.008673
4.927477
0.0000
PFRIES
0.400242
0.035910
11.14573
0.0000
R-squared
0.558109
Mean dependent var
1.044962
Adjusted R-squared
0.550032
S.D. dependent var
0.088419
S.E. of regression
0.059311
Akaike info criterion
-2.791796
Sum squared resid
1.347315
Schwarz criterion
-2.710595
Log likelihood
553.7961
F-statistic
69.10415
0.000000
Durbin-Watson stat
1.858383
Prob(F-statistic)
Transcribed Image Text:MODEL C Dependent Variable: PSODA Method: Least Squares Sample: 1410 Included observations: 391 Variable Coefficient Std. Error t-Statistic Prob. C 0.587703 0.031288 18.78366 0.0000 PRPBLCK 0.036566 0.019134 1.911017 0.0567 INCOME -1.09E-07 2.68E-07 -0.405990 0.6850 BK 0.066577 0.009123 7.297549 0.0000 KFC 0.038109 0.010344 3.684257 0.0003 RR 0.083831 0.010898 7.692683 0.0000 NJ 0.042735 0.008673 4.927477 0.0000 PFRIES 0.400242 0.035910 11.14573 0.0000 R-squared 0.558109 Mean dependent var 1.044962 Adjusted R-squared 0.550032 S.D. dependent var 0.088419 S.E. of regression 0.059311 Akaike info criterion -2.791796 Sum squared resid 1.347315 Schwarz criterion -2.710595 Log likelihood 553.7961 F-statistic 69.10415 0.000000 Durbin-Watson stat 1.858383 Prob(F-statistic)
Question 6
Does model C violate an important assumption? If so, which one?
Model C has omit variable bias.
Model C violates the assumption of no perfect collinearity
Model C violates the zero conditional mean assumption.
O Model C has multicollinearity issue.
Transcribed Image Text:Question 6 Does model C violate an important assumption? If so, which one? Model C has omit variable bias. Model C violates the assumption of no perfect collinearity Model C violates the zero conditional mean assumption. O Model C has multicollinearity issue.
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