Hi, Can anyone solve this question of Econometrics? Question 3: Consider the ave

Question

Hi, Can anyone solve this question of Econometrics?

Question 3: Consider the average monthly gross salary (A) and net salary (Y) of an employee in Germany from 1960 to 1970 (in 1000 DM). From the 11 observations we obtained the following simple linear regression Y,= 0.807 + 0.727X, se (0.132) (0.014), n=11. a) Carry out a t-test of E; A-0 vs.H : , # 0 at the significance level =0.05, where b) Carry out a t-test of H : B-0 vs.:# 0 at the significance level =0.01, where c) Calculate the correlation coefficient for this data set. Try to obtain the critical value of Bi is the intercept of the regression fiunction. State the test result. B2 is the slope of the regression function. State the test result. r at the significance level =0.01 using some suitable method.

Explanation / Answer

a)
TS = (0.807 )/0.132 =6.113636
df = n-2 = 9
p-value = 2 P(t > 6.113636) =   0.000
we reject thr null hypothesis

b)
TS = 0.727/0.014
= 51.9285
p-value = 2 P(t > 51.9285 ) = 0.000

we reject thr null hypothesis

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