Question: Regress Sales, RPDI, and CONF individually on an intercept and the three dummies and obtain residuals from these regressions, say S1, S2, S3; Now regress S1 on S2 and S3 (no intercept term in this regression) l1 and show that slope coefficients of S2 and S3 are precisely the same as those of RPDI and CONF obtained in Table, thus verifying the Frisch- Waugh theorem.
