Modelling Transport in an Interregional General Equilibrium Model with Externalities

Appendix C

I) A model with wage differentials by place of production (data set 1) and explanatory
variables gender, time, education, sector, age, unemployment, and distance is
examined. The squared residuals of the weighted regression (u²) are estimated on the
size of the group (N):

The results are:

All of the t-values are significant and therefore a group error component could be
present.

II) A model with wage differentials and explanatory variables gender, time, education,
age, unemployment, and distance is examined.

The test described above gives the following results:

All of the t-values are significant and therefore a group error component could be
present.

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