The following output summarizes the results of fitting a least squares regression to simulated data. Because we constructed these data using a computer, we know the SRM holds and we know the parameters of the model. We chose β0 = 7, β1 = 0.5, and σe = 1.5. The ft is to a sample of n = 50 cases.
(a) If β1 = 1 / 2 in the population, then why isn’t β1 = 1 / 2?
(b) Do the 95% confidence intervals for β0 and β1 “work” in this example? (By “work,” we mean that these intervals contain β0 and β1, respectively.)
(c) What’s going to change in this summary if we increase the sample size from n = 50 to n = 5,000?

  • CreatedJuly 14, 2015
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