Inference (4)

Question 1

What is the null hypothesis and how do we denote this?

Answer 1

The null hypothesis is what we are testing
e.g. test to see if Bj = 0
H0: Bj = 0

Question 2

What is a one-sided T-test?

Answer 2

one tail only

Question 3

What is a critical value?

Answer 3

A critical value is the threshold that determines whether your test statistic is significant in a hypothesis test.

It’s the cut-off point beyond which you reject the null hypothesis

Question 4

What is an overview of a t-test procedure?

Answer 4

Choose significance level α
Calculate critical value
Reject or accept null hypothesis

Question 5

When is the null hypothesis rejected?

Answer 5

if the observed value for our
test statistic t is larger than cα (critical value)

Question 6

What are the degrees of freedom in a regression t-test?

Answer 6

n-k-1

Question 7

What do we do when the significance level α is larger than the p-value?

Answer 7

Reject the null hypothesis

Question 8

What is a (1 − α)-confidence interval for βj?

Answer 8

a lower (random) endpoint β_j and an upper (random) endpoint β(bar)j such that the probability that the random interval
[βj , βj ] covers the true unknown parameter βj is (1 − α)

Question 9

What is the formula for a (1 − α)-confidence interval for βj?

Answer 9

check ppt 5

Question 10

What are the equations for the endpoints of a (1 − α)-confidence interval for βj?

Answer 10

check ppt 6

Question 11

What tests are used to see if you can exclude regressors from the model?

Answer 11

F-tests