Consider the simple regression model Yt = a + b Xt + ut in which Yt is total expenditure on travel and Xt is total income for the t th State. Including the District of Columbia, you have data for 51 observations. Both variables are measured in billions of dollars. The following is a atrial computer output for the above data.
VARIABLE COEFFICIENT STDERROR
Constant 0.4981 0.5355
Income 0.0556 0.0033
Error Sum of Squares (ESS) 417.110
Total Sum of Squares (TSS) 2841.330
i) (5 points) What is the econometric interpretation of the estimated coefficient for income? Does the numerical value appear reasonable?
ii) (14 points) Test individually whether the coefficients for the constant term and income are significantly different from zero at the 5% level. Be sure to state the null and alternative hypotheses, the test statistic and its distribution, the critical value (or range), and the criterion. What is your conclusion?
iii) (3 points) Compute the measure of goodness of fit.
iv) (5 points) Compute the 95% confidence intervals for the intercept and the slope coefficient.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more