econometrics (Page 364)

# econometrics (Page 364)

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take a look at the ttable given in Appendix D, you will observe that for any given value of df the probability of obtaining an increasingly large |t| value becomes progressively smaller. Thus, for 20 df the probability of obtaining a |t| value of 1.725 or greater is 0.10 or 10 percent, but for the same df the probability of obtaining a |t|value of 3.552 or greater is only 0.002 or 0.2 percent. Since we use the tdistribution, the preceding testing procedure is called appropriately the ttest. In the language of significance tests, a statistic is said to be statistically significant if the value of the test statistic lies in the critical region. In this case the null hypothesis is rejected. By the same token, a test is said to be statistically insignificant if the value of

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