Functional Form(continued) e We already know how to test joint exclusion restrictions to see if higher order terms or interactions belong in the model It can be tedious to add and test extra terms lus may find a square term matters when really using logs would be even better A test of functional form is Ramsey's regression specification error test (reset) Economics 20- Prof anderson 4Economics 20 - Prof. Anderson 4 Functional Form (continued) We already know how to test joint exclusion restrictions to see if higher order terms or interactions belong in the model It can be tedious to add and test extra terms, plus may find a square term matters when really using logs would be even better A test of functional form is Ramsey’s regression specification error test (RESET)