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Multiple Regression

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In a multiple regression equation two independent variables are considered, and the sample size is 25. The regression coefficients and the standard errors are as follows.

b1=2.676-----sb1=0.56
b2=-0.880----sb2=0.71

Conduct a test of hypothesis to determine whether either independent variable has a coefficient equal to zero. Would you consider deleting either variable from the regression equation? Use the 0.5 significance level.

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Solution Summary

The solution addresses a multiple regression equation two independent variables are considered, and the sample size is 25. The regression coefficients and the standard errors are as follows.

b1=2.676-----sb1=0.56
b2=-0.880----sb2=0.71

Conduct a test of hypothesis to determine whether either independent variable has a coefficient equal to zero. Would you consider deleting either variable from the regression equation? Use the 0.5 significance level.

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The goal of this problem is to test if the independent variable has a coefficient of zero.
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<br>This is the null hypothesis:
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<br>b1=b2=0
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<br>On the other hand, the alternative hypothesis is that one of the betas is not equal to zero
<br>b1 not equal to b2 not equal to 0.
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<br>The way to test this is quite simple. You have to use a t-test. First thing is that we have to find the critical value of the ...

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