2. Consider the regression model given by: B1B2X2i+B3X3i +B4X4i+ B5X5i + Ui Y (a) Suppose that a researcher believes neither X2 nor X4 are needed to explain Y and wants to formally test this conjecture. Show how to conduct the test in each of the following steps: Describe the null and alternative hypotheses. What regressions do you need to run? What test statistic do you need to calculate? (i) (ii) (iii) 1 (iv) (v) (vi) What is the distribution of the test statistic under the null hypothesis? What is the critical value of the test statistic? What is the decision rule you would follow? (b) Suppose that the researcher tested the relevance of X2 and X4, separately, and found neither coefficients are significant. What is the implication of this result on the test result of (a)?

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
icon
Related questions
Question
2. Consider the regression model given by:
B1B2X2i+B3X3i +B4X4i+ B5X5i + Ui
Y
(a) Suppose that a researcher believes neither X2 nor X4 are needed to explain Y and wants to
formally test this conjecture. Show how to conduct the test in each of the following steps:
Describe the null and alternative hypotheses.
What regressions do you need to run?
What test statistic do you need to calculate?
(i)
(ii)
(iii)
1
(iv)
(v)
(vi)
What is the distribution of the test statistic under the null hypothesis?
What is the critical value of the test statistic?
What is the decision rule you would follow?
(b) Suppose that the researcher tested the relevance of X2 and X4, separately, and found neither
coefficients are significant. What is the implication of this result on the test result of (a)?
Transcribed Image Text:2. Consider the regression model given by: B1B2X2i+B3X3i +B4X4i+ B5X5i + Ui Y (a) Suppose that a researcher believes neither X2 nor X4 are needed to explain Y and wants to formally test this conjecture. Show how to conduct the test in each of the following steps: Describe the null and alternative hypotheses. What regressions do you need to run? What test statistic do you need to calculate? (i) (ii) (iii) 1 (iv) (v) (vi) What is the distribution of the test statistic under the null hypothesis? What is the critical value of the test statistic? What is the decision rule you would follow? (b) Suppose that the researcher tested the relevance of X2 and X4, separately, and found neither coefficients are significant. What is the implication of this result on the test result of (a)?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman