econometrics (Page 354)

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
hypothesis should move from the null hypothesis. Is the observed ˆ β2compatible withH0? To answer this question, let us refer to the confidence interval (5.3.9). We know that in the long run intervals like (0.4268, 0.5914) will contain the trueβ2with 95 percent probability. Consequently, in the long run (i.e., repeated sampling) such intervals provide a range or limits within which the trueβ2may lie with a confidence coefficient of, say, 95%. Thus, the confidence interval provides a set of plausible null hypotheses. Therefore, ifβ2underH0falls within the 100(1−α)% confidence interval, we do not reject the null hypothesis; if it lies outside the interval, we may reject it.7
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern