Estimate a model with votea
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Estimate a model with voteA as the dependent variable and prtystrA , democA, log( expendA ), and log( expendB ) as independent variables. Obtain the OLS re-
siduals, u ˆ i , and regress these on all of the independent variables. Explain why you obtain R 2 5 0.
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Now, compute the Breusch-Pagan test for heteroskedasticity. Use the Fstatistic version and report the p -value.
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Compute the special case of the White test for heteroskedasticity, again using the
F statistic form. How strong is the evidence for heteroskedasticity now?
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