Question

where price: house prioe; assess: the assessed housing value (before the house was sold); lotaize: size of the lot, in feet; agrft: square footage; and bdrms: number of bedrooms. The econometrician uses Stats 'reg' command, Le., uses OLS estimation, to get the following results: 5s df Mode1 6.13852904 16 Total8.01760352 87092156362 iprice Number of obs " FC 1, 6 280,94 Prob R-squared0.7656 Adj R-squared " 0.7629 Root MSE 0.0000 Restdual .87907 44886 .021849703 14782 Coef. std. Err t P>Itl t95% cont. Interval] lassess1.013407 .0604609 16.76 0.000 8932147 1.133599 .ms!..1614743 .3460739 -o.47 0.642-8494.64 .5264971 Table A df MS Number of obs FC 4, 83) 70.58 model 6.19607473 4 1.54901868 0.0000 Restdual .8215287983 02194613 Tota) 8.01760352 87 092155362 t R-squared 0.7728 Adj R-squared0.7619 Root MSE 14814 price Coef Std. Err 007437 0338 392 0220983 P>It1 t95% conf. Interval] assess 1.043065 lotsize 151446 6.89 0,000 5615 .190,848 032384 13843050. 750.458 7418453 1.344285 0841352 1720942 0777918 .86929721.396783 0692593 378571 1.53 0.129 -.0101135 63743 5696647.46 0.645 Table B n) Consider Table B. Test the hypothesis that Ho : βο--0 against one-sided alternative, HA for 5% significance level. (You can use normal table b) Consider Table B. Test the hypothesis that Ha : =1 against two-sided alternative, la : β1- for 10% significance level. c) Test the hypothesis that 92 9,0 d) If the variance of price changes with independent variables, what can you say about t test for 80 against one-sided alternative, HA: B 0?

Please break down each part ( a, b, c and d) in detail. Thank you

Answer 1

A)

For β₀, the P value from the table B is 0.0000 which is smaller than 0.05. In this case, the alternate hypothesis is accepted. The coefficient can't take the value of 0 in this regard.

Here, β₀ < 0 is Accepted.

B)

For β₁, the P value from the table B is 0.848 which is larger than 0.05. In this case, the null hypothesis is accepted. The coefficient can take the value of 0 in this regard.

C)

For β₂ = β₃ = β₄, the P value from the table B for each of the coefficient are larger than 0.05 (0.848, 0.458, 0.129 respectively). In this case, the null hypothesis is accepted. The coefficients can take the value of 0 in this regard.

D)

For β₀, the P value from the table B is 0.0000 which is smaller than 0.05. In this case, the alternate hypothesis is accepted. The coefficient can't take the value of 0 in this regard.

Here, β₀ > 0 is Accepted..

End of the Solution..