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Regression with a Single Regressor: Hypothesis Tests and Confidence Intervals(SW Chapter 5)

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Hypothesis Testing and the Standard Error of

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Hypothesis Testing

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Formula for SE( )

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4 ways to conduct Hypothesis Tests

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Example: Wage vs. Age

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Example: Wage vs. Age

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Regression when X is Binary

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Interpretation when X is binary

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Heteroskedasticity and Homoskedasticity

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Homoskedasticity

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Heteroskedasticity

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Comparison of Group Means

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Example from the Current Population Survey

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The class size data

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So far we have (without saying so) assumed that u might be heteroskedastic.

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What if the errors are in fact homoskedastic?

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Two formulas for the se( )

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Robust standard errors in STATA

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Further Questions

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The Extended LS Assumptions

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Efficiency of OLS

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t-critical values