Economics 310 Lecture 6 Test for a Regression

Basic Hypothesis

Developing Test

F-Distribution

Logic of Test F f(F) 0 Non-Rejection Region Rejection Region  FcFc HAHA H0H0

Cigarette Demand Example VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 24 DF P-VALUE CORR. COEFFICIENT AT MEANS Y E E P E QLAG CONSTANT VARIANCE-COVARIANCE MATRIX OF COEFFICIENTS Y E-08 P E E-02 QLAG E E E-01 CONSTANT E E E E-01 Y P QLAG CONSTANT

Calculating the F

Simplifying the Calculation

Anova Table ANALYSIS OF VARIANCE - FROM MEAN SS DF MS F REGRESSION ERROR E-01 P-VALUE TOTAL E

F and R 2

Calculating F via R 2 - Example