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Unformatted text preview: 2. A Suitable Test Statistic is: 3. Finding the Critical Region The null hypothesis is also known as the maintained hypothesis 4. Estimate 5. Decide E. Measures of Goodness of Fit From the diagram: • (yi – ybar) = the total deviation of “y” from its mean (yi – ybar) • (yi – yhat) = the “i”th residual the unexplained deviation of “y” from its mean (error) • QUESTION : Explained by what? ANSWER : Explained by the covariance between X and Y For a positive relation (Xi > Xbar). Therefore, (yi > ybar) • Xi is greater than its mean • Yi is greater than its mean NOTES: As Xi is rising above its mean, so too is Yi rising above its mean. • (See graph above)...
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This note was uploaded on 06/03/2009 for the course ECON 203 taught by Professor Casler during the Spring '09 term at Allegheny.
 Spring '09
 Casler

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