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, uˆi, and regress these on all of the independent variables. Explain why you obtain R2 5 0.
(ii) Now, compute the Breusch-Pagan test for heteroskedasticity. Use the Fstatistic version and report the p-value.
(iii) 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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