*
*  Example 4.5
*  J. Wooldridge, Econometrics of Cross Section and Panel Data
*
*  Note: The sample data files include all required data transformations.
*        However, in many cases we show how these data transformations would
*        be created in RATS from the basic data, as this is something you will
*        need to know how to do in practice.
*
open data nls80.raw
data(format=free,org=columns) 1 935 wage hours iq kww educ exper tenure age $
  married black south urban sibs brthord meduc feduc
*
set lwage = log(wage)
set educ_iq = educ*iq
*
linreg lwage
# constant exper tenure married south urban black educ iq educ_iq
*
*  Test the exclusion of the ability proxies
*
exclude(title="Joint Test of Ability Proxies")
# iq educ_iq