This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: Econ 444 Elementary Econometrics Fall 2007 SUMMARY of CHAPTER 5 and HOMEWORK EXERCISE: 5 Due at the beginning of class on Wednesday, November 7 1 KEY TERMS AND CONCEPTS Confidence intervals, Confidence level, The t test, Critical value, Type I error, Type II error, Level of significance, Twotailed test, Onetailed test, Joint hypothesis testing, F test 2 FORMULAS AND RESULTS t = ˆ β k β k SE ( ˆ β k ) (1) is distributed as the tdistribution with ( N K ) degrees of freedom for k=1,2,...,K. To form a confidence interval, we first choose the confidence level, say 0.95, and find the t C value such that P [ ˆ β k t C SE ( ˆ β k ) ≤ β k ≤ ˆ β k + t C SE ( ˆ β k )] = 0 . 95 . (2) For a twotailed test, compute the t test statistic from Equation (1), get t C (the critical value ) from Table B1, and reject H if  t  > t C and accept H if  t  ≤ t C . For a multiple regression with K independent variables, F = R 2 /K (1 R 2 ) / ( N K 1) (3) follows the F distribution with...
View
Full
Document
This note was uploaded on 07/17/2008 for the course ECON 444 taught by Professor Ogaki during the Fall '07 term at Ohio State.
 Fall '07
 OGAKI
 Econometrics

Click to edit the document details