* HINT: * The program assumes that all files are stored in * C:\monographregression\computercode * change directory if code is located elsewhere clear cd C:\monographregression\computercode use "data\stata\rent98_00.dta" * Delete observations with area larger than 160 drop if area > 160 * Center invarea around zero sum invarea gen areainvc = invarea-_result(3) * Create orthogonal polynomials of yearc orthpoly yearc , generate(yearco yearco2 yearco3) degree(3) * Model beta_0 + beta_1*areainvc + beta_2*yearc + beta_3*yearc^2 + beta_4*yearc^3 + * + beta_5*nkitchen + beta_6*pkitchen + beta_7*year01 + epsilon gen co = 1 regress rentsqm_euro co areainvc yearco yearco2 yearco3 nkitchen pkitchen year01, noconst * Covariance matrix and regressio coefficients matrix cov = e(V) matrix beta = e(b) * Calculate the test statistic F matrix C = (cov[6,6] , cov[6,7] \ /* */ cov[7,6] , cov[7,7]) matrix beta1 = ( beta[1,6] \ beta[1,7] ) * calculate test statistic by hand matrix F = 1/2*beta1'*inv(C)*beta1 matrix list F * Test nkitchen = 0, pkitchen = 0 using stata command `test' test nkitchen pkitchen