econometrics ch 5

# econometrics ch 5 - Testing Hypothesis About Coe cients Con...

This preview shows pages 1–6. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Testing Hypothesis About Coe cients Con dence Intervals Regression on a Binary Variable Heteroskedasticity and Homoskedasticity Gauss-Markov Theorem Introduction to Econometrics Chapter 5: Regression with a Single Regressor: Hypothesis Testing Geo rey Williams [email protected] October 11, 2010 Geo rey Williams [email protected] Introduction to Econometrics Chapter 5: Regression with a Testing Hypothesis About Coe cients Con dence Intervals Regression on a Binary Variable Heteroskedasticity and Homoskedasticity Gauss-Markov Theorem How strong is that pattern? Just because we can t a line doesn't necessarily mean the line MEANS SOMETHING. In the previous chapter we discussed t . An even more important idea is the signi cance of the regression coe cient(s). In the case of the school districts data, we found a coe cient of 2 : 28 - reducing average class size in a school district by one student was related to a 2.28 point increase in test scores. In theory the school administrators could use that information, reduce class sizes and improve results. But that would cost a huge amount of money - before you do that, you want to be sure. Geo rey Williams [email protected] Introduction to Econometrics Chapter 5: Regression with a Testing Hypothesis About Coe cients Con dence Intervals Regression on a Binary Variable Heteroskedasticity and Homoskedasticity Gauss-Markov Theorem How strong is that pattern? Just because we can t a line doesn't necessarily mean the line MEANS SOMETHING. In the previous chapter we discussed t . An even more important idea is the signi cance of the regression coe cient(s). In the case of the school districts data, we found a coe cient of 2 : 28 - reducing average class size in a school district by one student was related to a 2.28 point increase in test scores. In theory the school administrators could use that information, reduce class sizes and improve results. But that would cost a huge amount of money - before you do that, you want to be sure. Geo rey Williams [email protected] Introduction to Econometrics Chapter 5: Regression with a Testing Hypothesis About Coe cients Con dence Intervals Regression on a Binary Variable Heteroskedasticity and Homoskedasticity Gauss-Markov Theorem Hypothesis Testing! Again! Just as we did in chapter 3, we can formulate a 2-sided or 1-sided hypothesis. Two-sided version would be: H : 1 = 1 ; vs. H 1 : 1 6 = 1 ; A one-sided version would be: H : 1 = 1 ; vs. H 1 : 1 &amp;lt; 1 ; or H : 1 = 1 ; vs. H 1 : 1 &amp;gt; 1 ; Geo rey Williams [email protected] Introduction to Econometrics Chapter 5: Regression with a Testing Hypothesis About Coe cients Con dence Intervals Regression on a Binary Variable Heteroskedasticity and Homoskedasticity Gauss-Markov Theorem Hypothesis Testing! Again!...
View Full Document

{[ snackBarMessage ]}

### Page1 / 40

econometrics ch 5 - Testing Hypothesis About Coe cients Con...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online