Testing the drop variable in the regression model

From the result of t-test as well as the p value (p value of Production of Rice (P) = 0.8122), we can see that Pis not significant or have little effect on the Vietnam Rice export. Consequently, we use this test to find out whether our model is better if we drop the independent variable (P) out of the origin model.
Dependent Variable: Y Method: Least Squares Date: 04/30/12 Time: 10:08 Sample: 1995 2010 Included observations: 14 Variable X1 X2 LN_X3 X4 C R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood F-statistic Prob(F-statistic) Coefficient 8.756095 0.679197 -477.5507 -0.072103 -2583.838 0.929320 0.897906 397.5447 1422376. -100.5666 29.58354 0.000034 Std. Error 2.883436 0.218815 224.4676 0.107401 856.3327 t-Statistic 3.036688 3.103974 -2.127481 -0.671345 -3.017329 Prob. 0.0141 0.0126 0.0623 0.5189 0.0145 4285.021 1244.190 15.08094 15.30918 15.05982 1.307165

Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter. Durbin-Watson stat

We assume: Dependent variable: Y is the exported quantity of Vietnam rice Independent variables: X1 is the different price between World price and Domestic price X2 is the exchange rate USD/VND from 1995 2010 X3 is the Vietnam inflation 1995 2010 X4 is the production of Vietnam rice 1995 - 2010 The new model after dropping variable P is:

The new eview table:

Dependent Variable: Y Method: Least Squares Date: 04/30/12 Time: 10:09 Sample: 1995 2010 Included observations: 14 Variable X1 X2 LN_X3 C R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood F-statistic Prob(F-statistic) Coefficient 9.618321 0.536184 -513.4707 -2860.495 0.925780 0.903514 386.4720 1493606. -100.9087 41.57837 0.000006 Std. Error 2.509705 0.048613 211.9259 729.7481 t-Statistic 3.832450 11.02961 -2.422879 -3.919839 Prob. 0.0033 0.0000 0.0359 0.0029 4285.021 1244.190 14.98695 15.16954 14.97005 1.405796

Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion Hannan-Quinn criter. Durbin-Watson stat

The new model: The testing of drop variable (F test): , relevant to drop Production out of the model , not relevant to drop Production variable Level of significance: F statistic:

F critical:

F statistic value:

Decision: Conclusion: There is not enough evidence to conclude that X4 (Production of Rice) is significant to our model. Therefore, our model from now on will be in 3-variables form.