ECO 3151 Study Guide - Midterm Guide: Hit106.9 Newcastle
2 Dec 2014
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Solution: in order to derive the ols estimator and. , please go through class notes and/ or chapter 2 of the textbook. The estimated regression line therefore is: (b) note: = 1. 4330. is measured in thousands of dollars, and is measured in thousands of dollars. The estimate 1. 4330 of means that an increase (decrease) in tuition of 1,000 dollars is associated on average with an increase (decrease) in mba graduates" annual salary gain equal to 1. 433 thousand dollars, or 1, 433 dollars. (c) The value of of 0. 2201indicates that 22. 01 percent of the total sample variation in (annual salary gain of graduates) is explained by the regressor (annual tuition fees). (d) From t distribution table, for two-tailed test, for df = 23, Since is not statistically different from zero at the 1% level, and we fail to reject. The regression equation of on may be written as: (1) Compare the slope and intercept coefficients of (1) and (2)
