Return to the child mortality example that we have discussed several times. In regression (7.6.2) we regressed child mortality (CM) on per capita GNP (PGNP) and female literacy rate (FLR). Now we extend this model by including total fertility rate (TFR). The data on all these vari- ables are already given in Table 6.4. We reproduce regression (7.6.2) and give results of the extended regression model below:

1. C^Mi = 263.6416 - 0.0056 PGNPi - 2.2316 FLRi (7.6.2)
se = (11.5932) (0.0019) (0.2099) R2 = 0.7077

2. C^Mi = 168.3067 - 0.0055 PGNPi - 1.7680 FLRi + 12.8686TFRi se = (32.8916) (0.0018) (0.2480) (?)
R2 = 0.7474

a. How would you interpret the coef?cient of TFR? A priori, would you expect a positive or negative relationship between CM and TFR? Jus- tify your answer.

b. Have the coef?cient values of PGNP and FR changed between the two equations? If so, what may be the reason(s) for such a change? Is the observed difference statistically signi?cant? Which test do you use and why?

c. How would you choose between models 1 and 2? Which statistical test would you use to answer this question? Show the necessary calculations.

d. We have not given the standard error of the coef?cient of TFR. Can you ?nd it out? (Hint: Recall the relationship between the t and F distributions.)