Consider the following regression output: Yi = 0.2033 + 0.6560 Xi Se = (0.0976) (0.1961) R 2

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Question:

Consider the following regression output:
Yi = 0.2033 + 0.6560 Xi
Se = (0.0976) (0.1961)
R
2 = 0.397 RSS = 0.0544 ESS = 0.0358
Where Y is the labor force participation rate of women (LFPR) in 1972 and X = labor force
participation of women in 1968. The regression results were obtained from a sample of 19
cities in United States.
a) How do you interpret the results? ( 6 marks)
b) Test the hypothesis: Ho = B2 = 1 against H1 = B2 > 1. Which test do you use? And why? (4
marks)
c) Suppose that the LFPR in 1968 was 0.58.On the basis of the regression results given above,
what is the mean LFPR in 1972? ( 2 marks)
d) Compute the t statistics for the regression coefficients under the null hypothesis that they are
equal to zero. ( 3marks )
e) Establish the 95% confidence interval for the above results is the mean value of LFPR in
1968 is 0.50.