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# Empirical - the 10 and 5 critical values are smaller than...

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Question 4.3 Part A The estimated regression is 13.96 – 0.073 Intercept 13.96 years Slope = -0.073 year per 10 miles Part B 20 miles Predicted years of completion – 13.96 -0.073*2 = 13.81 10 miles Predicted years of completion – 13.96 -0.073*1 = 13.89 Part C The regression is 0.074, which implies that the distance explains only 0.74% of the variance of education attainment. There are many other variables, which can impact the person education choices. Part D The standard error of the regression is 1.81 years. This is an estimate of the standard deviation of the regression error. The units of the standard error are the same as the units of the dependent variable, ED. Thus, the units are years

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Question 5.3 Part A The t-statistic for the slope coe cient is −0.073 .013 = −5.46. The absolute value of the t-statistic exceeds the 1% critical value for a two-sided t- test, which is 2.58. Thus, the estimated slope is signiFcant at the 1% level. Because
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Unformatted text preview: the 10% and 5% critical values are smaller than the 1% critical value, the estimated slope is also signiFcant at the 10% and 5% level. The p-value of the test is 2 · Φ(−5.46) which we already know will be less than .0038 (2× the smallest value in Appendix Table 1). Part B The 95% conFdence interval for the slope coe ﬃ cient is −0.073 ± 1.96 × .013, or (−0.100, −0.047). Part C 13.94 – 0.064 dist The estimated regression says that completed years of education for females are expected to decrease by .064 years as the distance from a student’s high school to the nearest college increases by 10 miles Part D 13.98 – 0.084 dist The estimated regression says that completed years of education for males are expected to decrease by .084 years as the distance from a student’s high school to the nearest college increases by 10 miles...
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Empirical - the 10 and 5 critical values are smaller than...

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