Suppose that (Y i, X i ) satisfy the assumptions in Key Concept 4.3 and, in addition, u i , is N( 0, 2 ,) and is independent of X i. A sample of size n = 30 yields 11eb817c_7781_1d49_84e6_811ea34fabb5_SM2685_00 where the numbers in parentheses are the homoskedastic-only standard errors for the regression coefficients. a. Construct a 95% confidence interval for 0. b. Test H 0 : 1 = 55 vs. H 1 : 1 55 at the 5% level. c. Test H 0 : 1 = 55 vs. H 1 : 1 55 55 at the 5% level.

Introduction to Econometrics 3rd Edition by James Stock, Mark Watson

Edition 3ISBN: 978-9352863501

Introduction to Econometrics 3rd Edition by James Stock, Mark Watson

Edition 3ISBN: 978-9352863501

Exercise 9

Suppose that (Y i, X i ) satisfy the assumptions in Key Concept 4.3 and, in addition, u i , is N( 0, 2 ,) and is independent of X i. A sample of size n = 30 yields

where the numbers in parentheses are the homoskedastic-only standard errors for the regression coefficients.
a. Construct a 95% confidence interval for 0.
b. Test H 0 : 1 = 55 vs. H 1 : 1 55 at the 5% level.
c. Test H 0 : 1 = 55 vs. H 1 : 1 55 55 at the 5% level.

Explanation

Verified

It is given that
satisfy the least squ...