in the 1980s, Tennessee conducted an experiment in which kindergarten students are randomly assigned to "regular" and "small" classes and given standardized tests at the end of the school year. Let SmallClass denote a binary variable equal to 1 if the student is assigned to a small class and equal to 0 otherwise. We also introduce Expn which denote the expenditure for each student. A regression of TestScore on SmallClass and Expn yields where the numbers in the parentheses are standard errors. The fact that ₁-(8.0-0)/4.0-2.0>1.96 and 1₂ (2.0-0)/1.0-2.0>1.96 does not imply that we statistically conclude that neither class size or expenditure for a student improves the test score at the 5% level.. True Test Score 918.0 +8.0 x SmallClass +2.0x Expn, (1.6) (4.0) (1.0) False

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