Chow test in Eviews

Problem

Using the data wages1, run a regression of wage on exper and school. Instead of running one regression using all observations (pooled), we could run two regressions, one regression each for each gender. Perform a Chow test to test the null, “There is no significant improvement in fit from running two regressions”. Use the built-in Chow test in your econometric package to find the same \(F\) -value.

Hint For this to work, data must be ordered such that we have the entire subsample A before the entire subsample A. For wages1 this is already the case. Observations 1-1569 are female and 1570-3294 are male. Go to View, Stability diagnostics, Chow Breakpoint Test. For “breakpoint dates” enter 1570 (the first observation for the second subsample).

Solution

You find the test in View (of equation window), Stability diagnostics, Chow