TABLE 13-8
A financial analyst wanted to examine the relationship between salary (in $1,000) and four variables: age (X1 = Age), experience in the field (X2 = Exper), number of degrees (X3 = Degrees), and number of previous jobs in the field (X4 = Prevjobs). He took a sample of 20 employees and obtained the following Microsoft Excel output:

-Referring to Table 13-8, the analyst wants to use a t test to test for the significance of the coefficient of X₃. At a level of significance of 0.01, the department head would decide that β₃ ≠ 0.

Question

TABLE 13-8
A financial analyst wanted to examine the relationship between salary (in $1,000) and four variables: age (X1 = Age), experience in the field (X2 = Exper), number of degrees (X3 = Degrees), and number of previous jobs in the field (X4 = Prevjobs). He took a sample of 20 employees and obtained the following Microsoft Excel output:
 
-Referring to Table 13-8, the analyst wants to use a t test to test for the significance of the coefficient of X₃. At a level of significance of 0.01, the department head would decide that β₃ ≠ 0.

Quizplus · Accepted Answer

The Excel output provides the t-value and the corresponding p-value for each coefficient. To test the significance of the coefficient of X₃ (Degrees), we need to look at the t-value and the corresponding p-value for that variable. In this case, the t-value for X₃ is -3.09 and the p-value is 0.005, which is less than the level of significance of 0.01. Therefore, we reject the null hypothesis that β₃ = 0 and conclude that β₃ is different from 0 at a significance level of 0.01. Therefore, the statement given in the question is true.

TABLE 13-8 A Financial Analyst Wanted to Examine the Relationship Between Salary