Some selected output from two models is reported here, where di is a binary (0,1) dummy variable: (1) Full Model: Y i = 1 + 2 X i + 3 d i + 4 (X i d…

Some selected output from two models is reported here, where di is a binary (0,1) dummy variable:

(1) Full Model:  

Yi=β1+β2Xi+β3di+β4(Xi × di)+u

RSS= 40.61   N=250

(2) Restricted Model: Yi=β1+β2Xi+β4(Xi × di)+u

RSS= 50.25   N=250

The t-statistic for conducting the test H0:β3=0,Ha:β3≠0

 is (to 2 decimal places):

-None of the stated options

-1.96

-58.40

-7.64

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