ProblemSet6 - Professor Mumford Econ 360 - Fall 2010...

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Unformatted text preview: Professor Mumford Econ 360 - Fall 2010 mumford@purdue.edu Problem Set 6 Due at the beginning of class on Tuesday, October 19 Multiple Choice Questions (16 points) Suppose you regressed the grade point averages ( GPA ) of 100 college students on their hours of study per week ( study ) and ACT score ( ACT ). You are interested in which of these two variables is relatively more important in determining GPA, and since hours studied per week and ACT are measured in different units, you decide to estimate the model with standardized variables to get beta coefficients (also called standardized coefficients). The results of the estimation are as follows: beta standard Variable coefficient error P-value study 0.20 0.10 0.05 ACT 0.10 0.05 0.05 R 2 = 0 . 90 SSR = 35 1. (4 points) What is the t-statistic for the ACT coefficient, assuming a null hypothesis that ACT has no effect on GPA . (a) 0.2 (b) 0.5 (c) 2 (d) 5 2. (4 points) What is the interpretation of the P-value for the study coefficient. (a) If the null hypothesis that the coefficient for study = 0 . 20 were true, the proba- bility of observing an estimate as extreme or more extreme than we did is 0.05. (b) If studying has no effect on GPA in the population, the probability of observing an estimate as extreme or more extreme than 0.2 is 0.05. (c) The probability of observing an estimate as extreme or more extreme than we did is 0.05 (d) Under the null hypothesis, the P-value is the probability of obtaining the param- eter estimate 0.20. 1 3. (4 points) What is the Total Sum of Squares (SST) for the model. Note that the sum of the squared residuals (SSR) is given above....
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This note was uploaded on 02/06/2012 for the course ECON 360 taught by Professor Na during the Spring '10 term at Purdue University-West Lafayette.

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ProblemSet6 - Professor Mumford Econ 360 - Fall 2010...

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