ECON 3740 Lecture Notes - Lecture 2: Equals Sign, Null Hypothesis, Statistical Hypothesis Testing
3 Dec 2017
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Document Summary
In the previous chapter we discussed several applications of the t-distribution to testing hypotheses in the linear regression model. In this chapter the range of possible hypotheses is extended beyond the scope of the t-distribution and accordingly we will introduce the f-distribution. Hypotheses can be thought of as restrictions on the population parameters. In chapter 6, all the hypotheses that we considered implied a single restriction e. g. h0 : 1 = 0. We will refer to these as single restriction hypotheses (srh). In this chapter we introduce the idea of multiple restriction hypotheses (mrh). To put he discussion in context consider the general linear regression model: Y = + 1x1 + 2x2 + + kxk + u. In this model there are h = k + 1 coefficients on the right hand side. If the model is estimated with n observations, then the number of degrees of freedom is (n - h).
