The Official Journal of the Pan-Pacific Association of Input-Output Studies (PAPAIOS)
Table 4 Results of diagnostic tests carried out.
Problem | Test carried out | Null hypothesis | Statistic | Probability value | Conclusion |
|---|---|---|---|---|---|
Serial correlation | Breusch–Godfrey LM Test (BG test) | No serial correlation | 1.950 (Chi2(1)) | 0.1626 | Fail to reject the null hypothesis |
Heteroscedasticity | Breusch–Pagan/Cook–Weisberg test | Homoscedasticity | 0.11 (Chi2(1)) | 0.7443 | Fail to reject the null hypothesis |
Model specification | Ramsey RESET test | Model has no omitted variables | 0.71 (F(3,15)) | 0.5573 | Fail to reject the null hypothesis |
Normality | Jarque–Bera test | Residuals are normally distributed | 0.3048 (Chi2(2)) | 0. 8586 | Fail to reject the null hypothesis |
Multicollinearity | VIF | 4.11 (mean VIF) | The model does not suffer from multicollinearity | ||
Parameter stability | CUSUM6 and CUSUM squared | Parameters are stable | The null hypothesis cannot be rejected at the 5% critical bound (as can be seen in Appendix A) |