1. Suppose that we are interested in measuring the relationship between hourly wage and output productivity in the U.S economy. Variables hrwage, and outphr, denote the average hourly wage and output productivity in the U.S economy for year t. We start by estimating the model specification shown in equation (1) below log(hrwage) = -5.2 +1.53 log(outphr.), (0.033) (0.09) n = 41, R² = 0.967. i. Briefly comment on the value of the coefficient of determination, R², as shown in (2). ii. Test the null hypothesis that the elasticity of output productivity on hourly wage is zero against its two-tailed alternative at the 95% significance level. iii. Show how you can use the coefficient of determination, R², to test the null hypothesis that B₁ is equal to zero against ₁0 at the 95% significance level. How does your answer compare to that in (ii)?

1. Suppose that we are interested in measuring the relationship between hourly wage and output productivity in the U.S economy. Variables hrwage, and outphr, denote the average hourly wage and output productivity in the U.S economy for year t. We start by estimating the model specification shown in equation (1) below log(hrwage) = -5.2 +1.53 log(outphr.), (0.033) (0.09) n = 41, R² = 0.967. i. Briefly comment on the value of the coefficient of determination, R², as shown in (2). ii. Test the null hypothesis that the elasticity of output productivity on hourly wage is zero against its two-tailed alternative at the 95% significance level. iii. Show how you can use the coefficient of determination, R², to test the null hypothesis that B₁ is equal to zero against ₁0 at the 95% significance level. How does your answer compare to that in (ii)?

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter6: Exponential And Logarithmic Functions

Section6.8: Fitting Exponential Models To Data

Problem 3TI: Table 6 shows the population, in thousands, of harbor seals in the Wadden Sea over the years 1997 to...

See similar textbooks