prog def ramsey
version 2.1
        mac def _varlist "req ex min(2)"
        mac def _if "opt"
        mac def _in "opt"
        parse "%_*"
        parse "%_varlist", parse(" ")
        mac def _lhs "%_1"
        mac shift
        mac def _rhs "%_*"
        reg %_lhs %_rhs %_if %_in
           predict double yhat %_if %_in
           predict double _res %_if %_in, res
gen yh2=yhat^2
gen yh3=yhat^3
gen yh4=yhat^4
    while "%_1" != "" {
      mac def _vtype : type %_1
      if "%_vtype" != "byte" {
         mac def _i=%_i + 1
         gen zsq%_i=%_1 * %_1
         gen zcu%_i=%_1 * %_1 * %_1
         gen zqu%_i=%_1 * %_1 * %_1 * %_1
      }
         mac shift
}
di ""
di "Two versions of Ramsey's RESET test:"
di ""
di "First, as a test of heteroskedasticity:"
reg _res yh2 yh3 yh4 %_if %_in
    testparm yh*
di ""
di "Second, as a test of whether there are any omitted variables,"
di "or the functional form is misspecified:"
reg %_lhs %_rhs yh2 yh3 yh4 %_if %_in
    testparm yh*
reg %_lhs %_rhs z* %_if %_in
    testparm z*
cap drop yh* _res z*
end