Suppose you fit the model y =β0+β1x1+β1x22+β3x2+β4x1x2+εto n = 25 data points with the following results:

β^0=1.26,β^1= -2.43,β^2=0.05,β^3=0.62,β^4=1.81sβ^1=1.21,sβ^2=0.16,sβ^3=0.26, sβ^4=1.49SSE=0.41 and R2=0.83

  1. Is there sufficient evidence to conclude that at least one of the parameters b1, b2, b3, or b4 is nonzero? Test using a = .05.

  2. Test H0: β1 = 0 against Ha: β1 < 0. Use α = .05.

  3. Test H0: β2 = 0 against Ha: β2 > 0. Use α = .05.

  4. Test H0: β3 = 0 against Ha: β3 ≠ 0. Use α = .05.

Short Answer

Expert verified
  1. At 95% confidence interval, it can be concluded thatβ1=β2=β3=β4=0

  2. At 95% confidence interval, it can be concluded thatβ1=0 .

  3. At 95% confidence interval, it can be concluded thatβ2=0 .

4. At 95% confidence interval, it can be concluded that β3≠0 .

Step by step solution

01

Goodness of fit test

H0:β1=β2=β3=β4=0

Ha: At least one of the parametersβ1,β2,β3, andβ4is non zero

Here, F test statistic =SSEn-(k+1)=0.4125-5=0.0205

Value of F0.05,25,25 is 1.964

H0 is rejected if F statistic > F0.05,28,28. For α=0.05, since F < F0.05,28,28 Not sufficient evidence to reject Ho at 95% confidence interval.

Therefore, β1=β2=β3=β4=0 .

02

Significance of β

H0: β1=0

Ha: β1< 0

Here, t-test statistic = β^1sβ^1=-2.431.21=-2.008

Value oft0.05,25is 1.708

H0 is rejected if t statistic > t0.05,25. For α=0.05, since t < t0.05,25 Not sufficient evidence to reject Ho at 95% confidence interval.

Therefore, β1=0 .

03

Significance of β3

H0:β2= 0

Ha:β2> 0

Here, t-test statistic = β^2sβ^2=0.050.16=0.3125

Value oft0.05,25is 1.708

H0is rejected if t statistic > t0.05,25. For α = 0.05, since t < t0.05,31Not sufficient evidence to rejectHoat 95% confidence interval.

Therefore, β2=0 .

04

Significance of β3

H0:β3=0

Ha: β3≠0

Here, t-test statistic =β^3sβ^3=0.620.26=2.38461

Value oft0.025,25is 2.060

H0is rejected if t statistic > t0.05,24,24. For α = 0.05, since t>t0.05,31 Sufficient evidence to rejectHoat 95% confidence interval.

Therefore, β3≠0 .

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