This regression is based on cross-section data of 1744 individuals and the relationship between their weekly earnings (in dollars) and age (in years) during 2020. The regression yielded the following result: Estimated(EARN) = 239.16 + 5.20(Age) , R² = 0.05, SER = 287.21 Standard errors are reported as hereunder: SE(intercept) = (20.24) SE(Age) = (0.57) (a) Is the relationship between "Age" and "EARN" statistically significant? (b) Explain the meaning of heterskedasticity. Is here any reason to be concerned about heteroskedasticity in this model? Briefly explain your reasons. (c) Construct a 95% confidence interval for the slope coefficient, and use it to test for the statistical significance of the slope coefficient. (d) Construct a 95% confidence interval for the intercept coefficient, and use it to test for the statistical significance of the intercept coefficient.
This regression is based on cross-section data of 1744 individuals and the relationship between their weekly earnings (in dollars) and age (in years) during 2020. The regression yielded the following result: Estimated(EARN) = 239.16 + 5.20(Age) , R² = 0.05, SER = 287.21 Standard errors are reported as hereunder: SE(intercept) = (20.24) SE(Age) = (0.57) (a) Is the relationship between "Age" and "EARN" statistically significant? (b) Explain the meaning of heterskedasticity. Is here any reason to be concerned about heteroskedasticity in this model? Briefly explain your reasons. (c) Construct a 95% confidence interval for the slope coefficient, and use it to test for the statistical significance of the slope coefficient. (d) Construct a 95% confidence interval for the intercept coefficient, and use it to test for the statistical significance of the intercept coefficient.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![This regression is based on cross-section data of 1744 individuals and the relationship between their weekly earnings (in dollars) and age (in years) during 2020. The regression yielded the following result:
Estimated(EARN) = 239.16 + 5.20(Age) , R = 0.05, SER = 287.21
Standard errors are reported as hereunder:
SE(intercept) = (20.24)
SE(Age) = (0.57)
(a) Is the relationship between "Age" and "EARN" statistically significant?
(b) Explain the meaning of heterskedasticity. Is there any reason to be concerned about heteroskedasticity in this model? Briefly explain your reasons.
(c) Construct a 95% confidence interval for the slope coefficient, and use it to test for the statistical significance of the slope coefficient.
(d) Construct a 95% confidence interval for the intercept coefficient, and use it to test for the statistical significance of the intercept coefficient.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F20302e94-d3c6-4f09-bbaa-13fc40177676%2Fae1dfd21-7073-4c42-b73e-7f4cd745f377%2F1cedqh4_processed.png&w=3840&q=75)
Transcribed Image Text:This regression is based on cross-section data of 1744 individuals and the relationship between their weekly earnings (in dollars) and age (in years) during 2020. The regression yielded the following result:
Estimated(EARN) = 239.16 + 5.20(Age) , R = 0.05, SER = 287.21
Standard errors are reported as hereunder:
SE(intercept) = (20.24)
SE(Age) = (0.57)
(a) Is the relationship between "Age" and "EARN" statistically significant?
(b) Explain the meaning of heterskedasticity. Is there any reason to be concerned about heteroskedasticity in this model? Briefly explain your reasons.
(c) Construct a 95% confidence interval for the slope coefficient, and use it to test for the statistical significance of the slope coefficient.
(d) Construct a 95% confidence interval for the intercept coefficient, and use it to test for the statistical significance of the intercept coefficient.
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