3 The cost of attending your college has once again gone up. Although you have b
ID: 3309204 • Letter: 3
Question
3 The cost of attending your college has once again gone up. Although you have been told that education is investment in human capital, which carries a return of roughly 10% a year, you and your parents) are not pleased. One of the administrators at your university/college does not make the situation better by telling you that you pay more because the reputation of your institution is better than that of others. To investigate this hypothesis, you collect data randomly for 100 national universities and liberal arts colleges from the 2000-2001 U.S. News and World Report annual ranking. Next you perform the following regression ea = 72311637 +3.98520 Reputation-0.20 Size + 82406879 Dpriv (0.13) (2,154.85) (2,058.63 (664.58) -416.38 Dlibart-2,376.51 Dreligion 1,121.92) (1,007.86) R2 = 0.72 SER = 3,773.35Explanation / Answer
The value of f statistic = 1.23
The degrees of freedom for regression = 2 ( size and dilibart)
The degrees of freedom for error =( 100-1)- 2 = 97
The p value for f = 1.23 with (2,97) df is 0.2968 ( > 0.05)
The result is not significant, we don’t reject null hypothesis
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