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February 28, 2012
Midterm 1 Answers
Question 7 had a serious typo.
Posted by bparke at 10:21 PM | Comments (0)
February 23, 2012
Midterm 1
Posted by bparke at 04:27 PM | Comments (0)
February 21, 2012
Review
Posted by bparke at 04:28 PM | Comments (0)
February 16, 2012
The Income Project
We discussed the Income Project.
Posted by bparke at 12:23 AM | Comments (0)
February 14, 2012
F Tests - II
We continued our discussion of the regressions on the handouts.
Posted by bparke at 12:19 AM | Comments (0)
February 09, 2012
F Tests - I
The discussion of F tests was based primarily on handouts with example regressions and calculated F tests.
The F test is for a null hypothesis that one or more coefficients in a regression equal zero. We take these to be the last q coefficients.
Dougherty and I have slightly different notation for the F test.
The F statistics is non-negative. The table in the back of the book gives critical values. We reviewed the point that, for a one degree of freedom test (one coefficient), the F statistic is the square of the t statistic.
You cannot test the joint hypothesis that two regression coefficients both equal zero with two t tests. The t tests each locate critical points on an axis below and, together, they delineate a rectangle. The rejection region for the F test of this hypothesis is the region outside an ellipse.
It is usually the case that the F test rejects the null hypothesis when at least some of the individual t tests reject the single coefficient null hypothesis of zero. Using the individual t tests to reach a conclusion about the joint hypothesis is, however, non-professional.
Posted by bparke at 10:41 PM | Comments (0)
February 07, 2012
Specification Analysis
The most important ideas about the decision to include or exclude a potential regressor can be illustrated in the context of the possible regressions labelled (1) and (2) below.
There are four cases to consider.
Posted by bparke at 10:41 PM | Comments (0)
February 02, 2012
Testing
We start with the concepts of null and alternative hypotheses.
Story 1. "Where is theta?" is the general search for some statistical parameter theta.
Story 2. "Where is mu?" is the search for the expected value of a scalar random variable X. This story is popular in ECON 400.
Story 3. "Where is beta?" is the search for a regression coefficient. This story is very popular in ECON 570.
Story 4. The "Where is theta?" story can also be told in terms of a confidence interval. Students need to learn to apply this last story to the searches for mu and beta.
Posted by bparke at 07:56 PM | Comments (0)