(c) 10 marks

i)

Test the joint significance of the regressors white and lfaminc in (3). Conduct the test of

joint significance at the 5% significance level. Specify the unrestricted and restricted

models. State the null and alternative hypotheses, the form and sampling distribution of the

test statistic under the null, the sample and critical values for the test statistic, your decision

rule and your conclusion. Place the Eviews output for the restricted model in Appendix

(c).

ii) Comment on the statement that the race of the mother has no effect on birth weight once

we control for family income, the gender of the baby and cigarette consumptions by the

mother during pregnancy.

(8 marks)