Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 10

Consider the estimated equation from Example 4.3, which can be used to study the effects of skipping class on college GPA:

(i) Using the standard normal approximation, find the 95% confidence interval for

?hsGPA.

(ii) Can you reject the hypothesis H0: ?hsGPA = .4 against the two-sided alternative at the 5% level?

(iii) Can you reject the hypothesis H0: ?hsGPA = 1 against the two-sided alternative at the 5% level?

Step 1 of 6

(i)

Given that and its standard error , the 5% critical value is ‘1.96’ from t-table. The degrees of freedom are 137 (141 minus 4).

The 95% confidence interval for ßhsGPA, using standard normal approximation is as follows: