Calculate value of the t-statistic

Assignment Help Econometrics

Reference no: EM1376094

Suppose you have some information on a sample of investment bankers, and are interested in impacts of height and of seniority on their success. You estimate what you call Model A using a software package (which, like most econometrics packages, always reports p-values for two-sided hypothesis tests):

(A) SALARY = 90.2 + 26.7 HEIGHT_A + 13.9 SENIORITY - 52.3 PHD, Adj-R2 = 0.62
t=2.08 t=2.82 t=3.1
p-value=.050 p-value=.011 p-value=0.000

where

SALARY is measured in thousands of dollars, HEIGHT_A is adult height measured in inches and as deviations from average (using the male average for men, and the female average for women), SENIORITY is years with the employer, and PHD is a dummy equal to 1 if the person has a Ph.D.

a. How many observations do you have in your sample?

b. Your hypothesis about ADULT_HEIGHT is that positive deviations from average height raise a person's salary, and that negative deviations from average height lowers it. Is this a one-sided or two-sided hypothesis? ____________

c. You are not surprised that the coefficient on SENIORITY is positive. But it seems small to you, because you have recently read that "experts agree that each year of experience with an investment bank is worth another $25,000 in salary." You have a fairly small sample, so you doubt that the difference between your estimate and that of the experts is statistically significant. But you check anyway.

What is the size of the relevant standard error for your calculation? __________

What is the value of the t-statistic that you compute? ____________

What is the corresponding p-value? (If you use the table at the back of the textbook, an approximate value or a range is good enough.) ________________ ( Assume you are testing a two-sided hypothesis in this case.)

d. What salary does your model predict for a woman 70 inches tall who has been with the firm for 10 years and does not have a Ph.D.? (Assume average height for women is 65 inches)? ________

Reference no: EM1376094

Questions Cloud

How hospital-billing auditor has been examining patient bill : A hospital-billing auditor has been examining patient bills. Although almost all bills contain some errors, the defect rate has been 16percent.

Identify any gain or loss as a result of this distribution : Does Hayden identify any gain or loss as a result of this distribution and evaluate Hayden's basis in the land, in inventory, and in partnership interest immediately following the distribution.

What percent of the sample denotes will be greater : What percent of the sample denotes will be greater than 162 seconds? What percent of the sample denotes will be greater than 153 but less than 162 seconds?

Elucidate how long will it take to produce the unit : The first unit took 85 hrs to produce. Depend on past experience with manufacturing similar units, Cambridge estimates that the learning rate is 93 percent. Elucidate how long will it take to produce the 5th unit.

Calculate value of the t-statistic : Suppose you have some information on a sample of investment bankers, and are interested in impacts of height and of seniority on their success.

Designate a company with whose headquarters are located : Designate a company with whose headquarters are located in the state in which you live. Use the Internet to research the company as well as any major initiatives

Calculate the equivalent units of production : Calculate the equivalent units of production for direct materials and conversion costs for month. Use the FIFO costing method.

Illustrate what types of personnel security efforts : illustrate what types of personnel security efforts does your worker use to enhance security at your organization.

Forecast the company''s sales, earnings and cash flows : Forecast the company's sales, earnings and cash flows each year for the next five years. Defend your results and explain which models you used to make the forecasts.

User Account

All Pages