Suppose a data set of 200 observations (n = 200) was analyzed using OLS to examine the relationship between CEO salary and various measures of firm performance. The regression results are as follows, with standard errors in parentheses: logy = 5+ 0.2logx₁0.03x₂ +0.002x3 (0.2) (0.04) (0.004) where? (0.009) y = CEO salary in thousands of dollars X₁ = annual firm sales X2 = percentage of sales lost to competitors X3 = return on stock in percent R² = 0.290 Suppose you want to test the null hypothesis that percentage of sales lost to competitors has no ceteris paribus effect on the salaries of CEOs. For the one-sided alternative hypothesis ß₂ < 0 and 1% rejection rule (i.e., at the 1% level), you would_ the null hypothesis that B₂ = 0.

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Suppose a data set of 200 observations (n = 200) was analyzed using OLS to
examine the relationship between CEO salary and various measures of firm
performance. The regression results are as follows, with standard errors in
parentheses:
logy = 5 + 0.2logx₁0.03x₂ +0.002x3
(0.2) (0.04)
(0.004)
where?
(0.009)
y = CEO salary in thousands of dollars
X₁ = annual firm sales
X₂ = percentage of sales lost to competitors
X3 = return on stock in percent
R² = 0.290
Suppose you want to test the null hypothesis that percentage of sales lost to
competitors has no ceteris paribus effect on the salaries of CEOS.
For the one-sided alternative hypothesis ß₂ < 0 and 1% rejection rule (i.e., at the
1% level), you would_
the null hypothesis that ß₂ = 0.
Transcribed Image Text:Suppose a data set of 200 observations (n = 200) was analyzed using OLS to examine the relationship between CEO salary and various measures of firm performance. The regression results are as follows, with standard errors in parentheses: logy = 5 + 0.2logx₁0.03x₂ +0.002x3 (0.2) (0.04) (0.004) where? (0.009) y = CEO salary in thousands of dollars X₁ = annual firm sales X₂ = percentage of sales lost to competitors X3 = return on stock in percent R² = 0.290 Suppose you want to test the null hypothesis that percentage of sales lost to competitors has no ceteris paribus effect on the salaries of CEOS. For the one-sided alternative hypothesis ß₂ < 0 and 1% rejection rule (i.e., at the 1% level), you would_ the null hypothesis that ß₂ = 0.
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