*
* Example 9.2 from page 293
*
open data hprice1.raw
data(format=free,org=columns) 1 88 price assess bdrms lotsize sqrft colonial lprice lassess llotsize lsqrft
*
linreg price
# constant lotsize sqrft bdrms
*
* RESET test. We'll first show how to do this test yourself, then show how to use
* the @RegRESET procedure to do it more easily.
*
prj phat
set phat2 = phat**2
set phat3 = phat**3
linreg price
# constant lotsize sqrft bdrms phat2 phat3
exclude(title="RESET Test-Cubic")
# phat2 phat3
*
* Use @RegRESET(h=power) immediately after the regression that you want to test.
* Since we've already done the auxiliary regression to show how the mechanics of
* the RESET test, we need to redo the original regression.
*
linreg price
# constant lotsize sqrft bdrms
@RegRESET(h=3)
*
* Log functional form
*
linreg lprice
# constant llotsize lsqrft bdrms
@RegRESET(h=3)