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

Exercise 1

For the following calculations, use the results in column (4) of Table 13.2. Consider two classrooms, A and B, with identical values of the regressors in column (4) of Table 13.2, except that:
a. Classroom A is a "small class" and classroom B is a "regular class." Construct a 95% confidence interval for the expected difference in average test scores.
b. Classroom A has a teacher with 5 years of experience and classroom B has a teacher with 10 years of experience. Construct a 95% confidence interval for the expected difference in average test scores.
c. Classroom A is a small class with a teacher with 5 years of experience and classroom B is a regular class with a teacher with 10 years of experience. Construct a 95% confidence interval for the expected difference in average test scores. (Hint: In STAR, the teachers were randomly assigned to the different types of classrooms.)
d. Why is the intercept missing from column (4)