For the model y = β₀+ β₁x + β₂d + ε, which test is used for testing the significance of a dummy variable d? A) F test B) chi-square test C) z test D) t test

Question

Quizplus · Accepted Answer

The t test is used for testing the significance of a dummy variable in a regression model. This test evaluates whether the coefficient associated with the dummy variable (in this case, β₂ for variable d) is significantly different from zero, indicating that the dummy variable has a statistically significant effect on the dependent variable y.

For the Model Y = β0 + β1x + β2d

For the Model Y = β₀+ β₁x + β₂d