Which of the following can be used to conduct the test for individual significance of explanatory variables?
A) Only p-value approach.
B) Only confidence intervals of the regression coefficients.
C) Neither p-value approach nor confidence intervals.
D) Both, p-value approach and confidence intervals.

Question

Quizplus · Accepted Answer

Both the p-value approach and confidence intervals can be used to conduct the test for individual significance of explanatory variables. The p-value approach calculates the probability of observing a regression coefficient as extreme as the one in the sample, assuming the null hypothesis that the coefficient is zero. A small p-value indicates strong evidence against the null hypothesis and in favor of the alternative hypothesis that the coefficient is significantly different from zero. Confidence intervals provide a range of values that the true population coefficient is likely to fall within, with a certain level of confidence. If the interval does not contain zero, there is evidence of significance. Therefore, both approaches provide useful information for testing the significance of individual explanatory variables in regression analysis.

Which of the Following Can Be Used to Conduct the Test