Thirtyfour observations of a dependent variable Y and two in

Thirty-four observations of a dependent variable (Y) and two independent variables resulted in an SSE of 300. When a third independent variable was added to the model, the SSE was reduced to 250. At 95% confidence, determine whether or not the third independent variable contributes significantly to the model.

Calculate the value of the F test statistic

Solution

Given a dependent variable and two independent variable, the SSE is 300

When we include a new independent variable, the SSE is reduce to 250.

For this we calculate the F-test statistic using SSE and SST but we donot known SST.

So, we donot include third variable because the value of F-test is greater than two variable, its divided by SSE.