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Econometrics Assignment 2 Due date: Nov. 17th, in Class.

1. You estimate a simple linear regression model using a sample of 62


observations and obtain the following results (estimated standard errors in
parentheses below coefficient estimates):
y = 97.25 + 33.74 *x
(3.86) (9.42)
What are the endpoints of the interval estimator for 2 with a 95% interval
estimate?
a.) (14.90, 52.58)
b.) (24.32, 43.16)
c.) (-3.58, 3.58)
d.) (30.16, 37.32)

2. Which of the following is not a component of a hypothesis test?


a.) null hypothesis
b.) goodness-of-fit
c.) test statistic
d.) rejection region

3.) For which alternative hypothesis do you reject H0 if t≤t (,N-2)?


a.) k = c
b.)  k ≠ c
c.) k > c
d.) k < c

4.) For which alternative hypothesis do you reject H0 if |t| ≤t (,N-2)?


a.) k = c
b.)  k ≠ c
c.) k > c
d.) k < c

5.) In which case would testing the null hypothesis involve a two-tailed statistical test?
a.) H1: Incentive pay for teachers does affect student achievement
b.) H1: Higher sales tax rates does not reduce state tax revenues
c.) H1: Extending the duration of unemployment benefits does not increase the
length of joblessness
d.) H1: Smoking does not reduce life expectancy

6.) When should a left-tailed significance test be used?


a.) When economic theory suggests the coefficient should be positive
b.) When it allows you to reject the null hypothesis at a lower p-value
c.) When economic theory suggests the coefficient should be negative
d.) When you know the true value of 2 is positive.

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7.) Which of the following expressions is NOT equal to Ʃ(yi - y̅ )2 ?
a.) Ʃ(ŷ i-y̅ )2+ Ʃei2
b.) SSR + SSE
c.) SSR/SSE
d.) SST

8.) What does R2, the coefficient of determination, measure?


a.) the probability of the true value falling within the forecast interval
b.) the p-value on the coefficient we are using to test our hypothesis of interest
c.) the confidence interval of the error terms as determined by the coefficients
d.) the proportion of the variation in y explained by x within the regression model

9.) How should k in the general multiple regression model be interpreted?


a.) The number of units of change in the expected value of y for a 1 unit increase in x k
when all remaining variables are unchanged
b.) the magnitude by which xk varies in the model
c.) the amount of variation in y explained by xk in the model
d.) the number of variables used in the model.

10.) You estimate a model with 5 explanatory variables and an intercept from a data
set with 247 observations. To test hypotheses on this model you should use a t
distribution with how many degrees of freedom?
a.) 242
b.) 120
c.) ∞
d.) 241

11.) A model estimated using a dataset with 125 observations generates the following
results.
Std.
Variable  Error t P>|t|
x2 -0.01264 0.005519 -2.28937 0.022
x3 0.595792 0.014482 41.13934 0.000
x4 1.124589 0.877192 1.282032 0.200
x5 0.323742 0.060709 5.332661 0.000
Constant 8.86016 1.766116 5.016749 0.000

What are the endpoints for the 95% confidence interval for 3?

a.)(-0.6842, 1.8758)
b.)(-1.3842, 2.5758)
c.)(.5672, 6245)
d.)(-40.5435 , 41.7251)
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Exercises from Textbook

Page 119 3.2 (you don’t need to de part e) 3.4 (you don’t need to do part c and f)

Page 157 4.1

Page 159 4.6