Consider the results in Table 5. After running the regression, we test whether the variables onwer and hhinc are jointly statistically significant at 5%. The value of the F-statistic is 323.27. Note that the sample size is 1,593. What is the outcome of the test? Would it be correct to reject the null h

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Consider the results in Table 5. After running the regression, we test whether the
variables onwer and hhinc are jointly statistically significant at 5%. The value of the
F-statistic is 323.27. Note that the sample size is 1,593. What is the outcome of the
test? Would it be correct to reject the null hypothesis if either the t-statistic for hhinc
or the t-statistic for owner exceeded 1.96 in absolute value? Explain.

The questions below are based on a dataset containing the characteristics of 5,407
households. In particular, we will use the following variables:
- size: home size, measured in square feet.
- hhinc: annual household net income, measured in euros.
- owner. dummy variable equal to 1 if the living space is owned, and 0 if the living
space is rented.
- hhsize1: dummy variable equal to 1 if the number of household's members is 1 or
2, and 0 otherwise.
hhsize2: dummy variable equal to 1 if the number of household's members is 3 or
4, and 0 otherwise.
hhsize3: dummy variable equal to 1 if the number of household's members is 5 or
above 5, and 0 otherwise.
- edu: education level of household's members.
The Appendix contains tables with the critical values of the standard normal distribution and
the F distribution.
Transcribed Image Text:The questions below are based on a dataset containing the characteristics of 5,407 households. In particular, we will use the following variables: - size: home size, measured in square feet. - hhinc: annual household net income, measured in euros. - owner. dummy variable equal to 1 if the living space is owned, and 0 if the living space is rented. - hhsize1: dummy variable equal to 1 if the number of household's members is 1 or 2, and 0 otherwise. hhsize2: dummy variable equal to 1 if the number of household's members is 3 or 4, and 0 otherwise. hhsize3: dummy variable equal to 1 if the number of household's members is 5 or above 5, and 0 otherwise. - edu: education level of household's members. The Appendix contains tables with the critical values of the standard normal distribution and the F distribution.
Table 5
. regress size hhinc owner hhsizel hhsizez hhsize3, robust noconstant
Linear regression
Nunber of obs
1,593
F(5, 1588)
3895.70
Prob > F
0.0000
R-squared
0.9255
Root MSE
353.16
Robust
size
Coefficient std. err.
t
P>|t|
(95% conf. interval)
hhinc
6.80 0.000
.004567
0006717
0032495
.0058845
owner
404.7925
442.6217
hhsizel
675.8086
24.24222
27.88 0.00
628.2585
723.3587
hhsize2
788.6606
36.47628
21.62
717.1138
860.2073
hhsize)
993.6609
58.63294
16.95
e.000
878.6548
1108.667
Transcribed Image Text:Table 5 . regress size hhinc owner hhsizel hhsizez hhsize3, robust noconstant Linear regression Nunber of obs 1,593 F(5, 1588) 3895.70 Prob > F 0.0000 R-squared 0.9255 Root MSE 353.16 Robust size Coefficient std. err. t P>|t| (95% conf. interval) hhinc 6.80 0.000 .004567 0006717 0032495 .0058845 owner 404.7925 442.6217 hhsizel 675.8086 24.24222 27.88 0.00 628.2585 723.3587 hhsize2 788.6606 36.47628 21.62 717.1138 860.2073 hhsize) 993.6609 58.63294 16.95 e.000 878.6548 1108.667
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