Question

A dependent variable is regressed on $K$ independent variables, using $n$ sets of sample observations. We denote SSE as the error sum of squares and $R^2$ as the coefficient of determination for this estimated regression. We want to test the null hypothesis that $K_1$ of these independent variables, taken together, do not linearly affect the dependent variable, given that the other $\left(K-K_1\right)$ independent variables are also to be used. Suppose that the regression is reestimated with the $K_1$ independent variables of interest excluded. Let $S S E^*$ denote the error sum of squares and $R^{* 2}$, the coefficient of determination for this regression. Show that the statistic for testing our null hypothesis, introduced in Section 12.5, can be expressed as follows: $$ \frac{\left(S S E^*-S S E\right) / K_1}{S S E /(n-K-1)}=\frac{R^2-R^{* 2}}{1-R^2} \cdot \frac{n-K-1}{K_1} $$

   A dependent variable is regressed on $K$ independent variables, using $n$ sets of sample observations. We denote SSE as the error sum of squares and $R^2$ as the coefficient of determination for this estimated regression. We want to test the null hypothesis that $K_1$ of these independent variables, taken together, do not linearly affect the dependent variable, given that the other $\left(K-K_1\right)$ independent variables are also to be used. Suppose that the regression is reestimated with the $K_1$ independent variables of interest excluded. Let $S S E^*$ denote the error sum of squares and $R^{* 2}$, the coefficient of determination for this regression. Show that the statistic for testing our null hypothesis, introduced in Section 12.5, can be expressed as follows:
$$
\frac{\left(S S E^*-S S E\right) / K_1}{S S E /(n-K-1)}=\frac{R^2-R^{* 2}}{1-R^2} \cdot \frac{n-K-1}{K_1}
$$
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Statistics for Business and Economics: Global Edition
Statistics for Business and Economics: Global Edition
Newbold P., Carlson… 8th Edition
Chapter 12, Problem 40 ↓

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- We have a full model with $K$ independent variables and a reduced model with $K-K_1$ independent variables (excluding $K_1$ variables). - $SSE$ is the error sum of squares for the full model, and $SSE^*$ is for the reduced model. - $R^2$ and $R^{*2}$ are the  Show more…

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A dependent variable is regressed on $K$ independent variables, using $n$ sets of sample observations. We denote SSE as the error sum of squares and $R^2$ as the coefficient of determination for this estimated regression. We want to test the null hypothesis that $K_1$ of these independent variables, taken together, do not linearly affect the dependent variable, given that the other $\left(K-K_1\right)$ independent variables are also to be used. Suppose that the regression is reestimated with the $K_1$ independent variables of interest excluded. Let $S S E^*$ denote the error sum of squares and $R^{* 2}$, the coefficient of determination for this regression. Show that the statistic for testing our null hypothesis, introduced in Section 12.5, can be expressed as follows: $$ \frac{\left(S S E^*-S S E\right) / K_1}{S S E /(n-K-1)}=\frac{R^2-R^{* 2}}{1-R^2} \cdot \frac{n-K-1}{K_1} $$
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