32 - Chapter 3, Exercise Solutions, Principles of...

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Chapter 3, Exercise Solutions, Principles of Econometrics, 3e 32 EXERCISE 3.1 (a) The required interval estimator is 11 se( ) c bt b ± . When 1 83.416, b = (0.975,38) 2.024 c tt == and 1 se( ) 43.410, b = we get the interval estimate: 83.416 ± 2.024 × 43.410 = ( 4.46, 171.30) We estimate that 1 β lies between 4.46 and 171.30. In repeated samples, 95% of similarly constructed intervals would contain the true 1 β . (b) To test 01 :0 H β= against H β ≠ we compute the t -value 1 1 83.416 0 1.92 se( ) 43.410 b t b −β = Since the t = 1.92 value does not exceed the 5% critical value (0.975,38) 2.024 c = = , we do not reject 0 H . The data do not reject the zero-intercept hypothesis. (c) The p -value 0.0622 represents the sum of the areas under the t distribution to the left of
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This note was uploaded on 11/23/2011 for the course ECON MPBE taught by Professor Jansveceny during the Spring '11 term at Metropolitní Univerzita Praha.

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