Problem Set

# Problem Set - Exercise 7.3 Part A The t-statistic is...

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Exercise 7.3 Part A The t -statistic is 5.46/0.21 = 26.0 > 1.96, so the coefficient is statistically significant at the 5% level. The 95% confidence interval is 5.46 ± 1.96 0.21. Exercise 7.3 Part B t -statistic is - 2.64/0.20 = - 13.2, and 13.2 1.96, so the coefficient is statistically significant at the 5% level. The 95% confidence interval is - 2.64 ± 1.96 0.20. Question 2 Part A The coefficient on GPA and METRICS are statistically different from zero at any reasonable level of significance. The sign of the coefficients suggest that student does with a higher GPA tend to get greater starting salaries. Also, students who have taken econometrics earn higher starting salaries. Literally, the model estimates suggest the impact of 1 letter grade in GPA is an increase in starting salary of \$1,643. Taking econometrics also adds \$5,033 to a graduates starting pay. The goodness of t measure, R2, suggests the model explains 74% of the variation in student starting salaries. Question 2 Part B

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## This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.

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Problem Set - Exercise 7.3 Part A The t-statistic is...

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