econometrics (Page 356)

# econometrics (Page 356)

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confidence. Hence, do not reject H0 if β 2 lies in this region. β β β FIGURE 5.2 A 100(1−α)% confidence interval for β2. 8 If you want to use the confidence interval approach, construct a (100−α)%one-sidedor one-tailconfidence interval for β2. Why? the hypothesis that the true MPC is 0.3, with 95% confidence. If the null hypothesis were true, the probability of our obtaining a value of MPC of as much as 0.5091 by sheer chance or fluke is at the most about 5 percent, a small probability. In statistics, when we reject the null hypothesis, we say that our finding is statistically significant.On the other hand, when we do not reject the null

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