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: Question 3 a) H : β 1 = β 2 = 0 H 1 : At least one of the β i s is not equal to zero p-value of F-test = 1.07E-26 ≈ 0 Conclusion: There is overwhelming evidence to infer that at least one of the explanatory variables is linearly related to per capita income. (3) b) For every percent increase in the percentage of the population under 15, per capita income decreases on average by $30.045 holding continent constant. (2) c) b 2 = 273.4328. The average per capita income in Latin America countries is $273.4328 higher than per capita income in African countries, keeping the percentage of the population under 15 constant (or for a given percentage of the population under 15). (2) d) Predicted value = 1415.5549 - 30.0455 x 40 + 273.4328 x 1 = 487.16645. The average per capita income is $487.16645. (1) e) H : β 2 = 0, H 1 : β 2 > 0 p-value = 1.48E-20/2 = 0.74E-20 (remember the test in the Excel output is two sided) Conclusion: There is overwhelming evidence to infer that per capita incomes are significantly...
View Full Document
This note was uploaded on 04/06/2010 for the course ECON 2342 taught by Professor James during the Three '09 term at ADFA.
- Three '09