ECON301_Handout_06_1213_02

# 5 it can be denoted by ˆ ˆ i or ˆ i s instead of

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5 It can be denoted by ˆ ˆ i or ˆ i s instead of ˆ i se .

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ECON 301 - Introduction to Econometrics I April, 2012 METU - Department of Economics Instructor: Dr. Ozan ERUYGUR e-mail: [email protected] Lecture Notes 17 Step 4. Reject the null hypothesis if * ˆ1 () i Tk tt  . If the alternative had been 0 : i A H  , 0 H would have been rejected if * i  . Equivalently, for either alternative, reject 0 H if * i . Using p -value approach, reject 0 H if the p -value is less than the level of significance. t Test: Decision Rules for all cases Type of hypothesis H 0 : the null hypothesis H 1 : the alternative hypothesis Decision rule: reject H 0 if Two-tail * ii * /2, df Right-tail * * , df Left-tail * * , df Notes: * i is the hypothesized numerical value of i . | t | means the absolute value of t . t or /2 t means the critical t value at the α or α/2 level of significance. df : degrees of freedom, (T − 2) for the two -variable model (including intercept), (T k 1) for the k independent variable model (including intercept).
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5 It can be denoted by ˆ ˆ i or ˆ i s instead of ˆ i se...

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