Research Methods Coursework Example | Topics and Well Written Essays - 1250 words

Research Methods - Coursework ExampleThe value of the statistic is too small and the probability is too high to turn away the null hypothesis. Thus, from the F-test we conclude that all coefficients could be jointly equal to zero. (ii) H0?2=0 against H0?2?0 using a significance take aim of 0.05 Since the ersatz hypothesis is that of non-equality but no direction (greater or less than) is specified, the test will be two tailed. The computed t- statistic is equal to -2.66937 which is greater in terms of domineering value than the two-tailed 5% critical value of 2.018 ( given up the number of observations and variables, the degrees of freedom are 42), we reject the null hypothesis that the coefficient of 1990 GDP per-capita is not statistically significantly divers(prenominal) from zero. (iii) H0?3=0 against H0?30 using a significance level of 0.05 Since here the election hypothesis is of the greater than type, the test will be right tailed. For the given number of observations an d variables, the critical one sided 5% t value is 1.682. Our computed t-value is 2.598522 which is greater than the critical value. Therefore, the null hypothesis is rejected at 5% level of confidence. This implies that we need statistical evidence of secondary enrollment having a positive impact on GDP addition. (iv) H0?7=0 against H0?70 using a significance level of 0.1 Again, the alternative is of the greater than type, implying a right tailed test. The critical 1% t-value is 2.418. From the table above, we find that the computed t-statistic is 1.50471. Since this is smaller than the critical value, we extend to reject the null hypothesis. Therefore, we fail to find any evidence that credit ratio has any statistically significant impact on GDP growth. Therefore, we find a contradiction among our conclusions in (i) and (ii). While in (i) we fail to reject the notion that all the coefficients on the predictor variables are jointly zero, we reject the hypothesis that the coeffic ient on the introductory explanatory variable, the 1990 percapita GDP is zero. But if this is true then (i) should have rejected the null in favour of the alternative which requires atleast one of the coefficients to be non-zero. Typically, such contradictions farm because of the violation of one or more of the basic assumptions underlying OLS estimation. Particularly, if on that point are outliers that distort the estimates, then such contradictory results can emerge. 3. Advice for choosing between alternative spending From the fitted model in the previous part we have found that secondary enrolment has a positive impact on GDP growth as does the private credit ratio. Infact the coefficients are quite close though that of private credit ratio is slightly lower. However, only the former is statistically significant. This implies that there is no evidence of increases in private credit ratio having any impacts on the GDP growth. Therefore I would recommend investing the sum of co in on policy measures that will increase the countrys rate of enrolment in secondary education. 4. Diagnostics for evaluating the validity