/***************************************************************
ECO304 Example
Topic 5: Multiple Regression Model
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/* a simple random variable called mars generated and
compare the R square between with/without it */
clear all
set seed 12345678
use https://bigblue.depaul.edu/jlee141/econdata/eco304/wage1
* Multiple Regression Model
regr wage educ exper
* Generate a random variable
gen mars = rnormal(0,1)
* Multiple Regression with Mars
regr wage educ exper mars
* Multiple Regression with tenure
regr wage educ exper tenure
* One time Installation of estout package for regresion table
ssc install estout
* Summary Table for Regression Models
reg wage educ exper
eststo r1
reg wage educ exper mars
eststo r2
reg wage educ exper tenure
eststo r3
esttab r1 r2 r3, r2 ar2
* Retricted F test Ho: b2=b3 =0
reg wage educ
reg wage educ exper tenure
test exper tenure
* Manual Calculation of Restricted F Statistic
display [(5980.68 - 4966.30)/2]/[4966.30/522]
* Residuals Comparison for three models
quietly regr wage educ
predict ei1, resid
quietly regr wage educ exper
predict ei2, resid
quietly regr wage educ exper tenure
predict ei3, resid
* Summary Stat for the residuals
sum ei*
hist ei1, normal bin(16) saving(ei1, replace)
hist ei2, normal bin(16) saving(ei2, replace)
hist ei3, normal bin(16) saving(ei3, replace)
graph combine ei1.gph ei2.gph ei3.gph, xcommon col(1) ycommon