Chow Test is normally run to understand if a single regression run on pooled data is more efficient to describe a relation between a dependent variable and a set of independent variables than the same regression being run separately on two subgroups of sample. The steps involved in running the Chow Test are:
(A) Run the regression model on pooled sample and calculate RSSp
(B) Run the same regression model on the two sub-samples separately and calculate RSS1, and RSS2
(C) Calculate the F statistic
(D) Check the critical F with related degrees of freedom and compare it with F calculated
(E) Do not reject Ho if Fcalculated < Fcritical
Choose the correct answer from the options given below:
1
(A), (B), (C), (D), (E)
2
(A), (D), (C), (B), (E)
3
(C), (A), (B), (D), (E)
4
(C), (B), (A), (D), (E)