Tradeshr, School60, and capstock60 are all determinants of economic growth. Use

Question

Tradeshr, School60, and capstock60 are all determinants of economic growth. Use regression to test teh hypothesis (at 5% significant level) that teh coefficients on the three variables are all 0, against the alternative that at least one coefficient is nonzero.

. reg growth tradeshr school60 capstock60 if tradeshr F R-squared Root MSE 64 5.56 0.0020 0.2227 1.6408 Linear regression Robust growth Coef. Std. Err. [95% Conf. Interval] tradeshr school60 capstock60 -cons 1.8185138259809 5013033 1426297 -.1365592 .0591959 -.3283159 .6716039 2.20 0.032 3.51 0.001 -2.31 0.025 -0.49 0.627 .1663055 3.470721 . 7866051 -.2549687 - .0181497 1.015092 .2160014 1.671724 display "Adjusted R-squared- “ e(r2-a) "Adjusted invalid name r(198) test tradeshr school60 capstock60 ( 1) tradeshr (2) school60=0 (3) capstock60=0 60)5.56 Prob F - 0.0020

Explanation / Answer

Answer:

Tradeshr, School60, and capstock60 are all determinants of economic growth. Use regression to test teh hypothesis (at 5% significant level) that the coefficients on the three variables are all 0, against the alternative that at least one coefficient is nonzero.

Calculated F( 3,60) =5.56, P=0.0020 which is < 0.05 level. Ho is rejected.

We conclude that at least one coefficient is nonzero.

Further, t tests shows that all the coefficients on the three variables are all different from 0.

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