Question: Let us consider the following regression model for a sample of n 3rd grade students T estScorei = ?0 + ?1SmallClassi + ui , i

Let us consider the following regression model for a sample of n 3rd grade students

T estScorei = ?0 + ?1SmallClassi + ui , i = 1, . . . , n

where SmallClassi is a binary variable that takes value 1 if the student belongs to a small class and 0 otherwise; and T estScore is the student's score in a standardized test taken at the end of the year. Let T estScore = Y and SmallClass = X. Also let n1 the number of students who attend small classes and n0 the number of students who attend large classes, such that n0 + n1 = n

Let us consider the following regression model for a sample of n

3rd grade studentsT estScorei = ?0 + ?1SmallClassi + ui , i

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