yi szlig1xi1 szlig2xi2 szlig3xi3 szlig4xi4


yi = ß1xi12xi23xi34xi4 + ei

For the hypothesis H0 : ß2=1, ß3= ß4

(a) propose a test statistic (with specific, rather than general, notation.)

(b) state what is its distribution under the null and why

(c) explain the conditions under which you would reject H0

(d) show how your test statistic can be computed from two regressions.

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Econometrics: yi szlig1xi1 szlig2xi2 szlig3xi3 szlig4xi4
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