Question

The following model was fitted to data on 50 states:
where
y` = annual salary of the attorney general of the state
x1 = average annual salary of lawyers, in thousands of dollars
x2 = number of bills enacted in previous legislative session
x3 = number of due process reviews by state courts that resulted in overturn of legislation in previous 40 years
x4 = length of term of the attorney general of the state
x5 = dummy variable taking value 1 if justices of the state supreme court can be removed from office by the governor, judicial review board, or majority vote of the supreme court and 0 otherwise
x6 = dummy variable taking value 1 if supreme court justices are elected on partisan ballots and 0 otherwise
The numbers in parentheses under the coefficients are the estimated coefficient standard errors.
a. Interpret the estimated coefficient on the dummy variable x5.
b. Interpret the estimated coefficient on the dummy variable x6.
c. Test, at the 5% level, the null hypothesis that the true coefficient on the dummy variable x5 is 0 against the alternative that it is positive.
d. Test, at the 5% level, the null hypothesis that the true coefficient on the dummy variable x6 is 0 against the alternative that it is negative.
e. Find and interpret a 95% confidence level for the parameter β1.


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  • CreatedJuly 07, 2015
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