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(a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?

(a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Please show how to answer a), b) and c).
Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?
Transcribed Image Text:Figure 5.7 in your textbook shows output from an econometric software program called EViews that is estimating the relationship between household income and food expenditure. (a) Construct a 95% confidence interval for b2. Show all your work. (b) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a relationship. Be sure to do all parts of the hypothesis test. (c) Test the null hypothesis that there is no relationship between household income and food expenditure, against the alternative hypothesis that there is a positive relationship. Be sure to do all parts of the hypothesis test. (d) Which of the above two approaches makes more sense to you as an economist - the alternative hypothesis (and associated rejection region) in part (b), or the alternative hypothesis (and associated rejection region) in part (c)? Why?
Dependent Variable: FOODEXP Method: Least Squares Sample: 1 40 Included Observations: 40 Variable C INCOME Coefficient 40.76756 0.128289 Std. Error 22.13865 0.030539 t-Statistic 1.841465 4.200777 Prob. 0.0734 0.0002
Transcribed Image Text:Dependent Variable: FOODEXP Method: Least Squares Sample: 1 40 Included Observations: 40 Variable C INCOME Coefficient 40.76756 0.128289 Std. Error 22.13865 0.030539 t-Statistic 1.841465 4.200777 Prob. 0.0734 0.0002
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