Econometrics

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Moderate

Interpreting the Estimated Standard Errors

EMETRC-GNYGXR

Suppose you estimate the model, $Y = 22.84 + 5.10 X$. The estimated standard error associated with the parameter on the $X$ variable is, $SE_X = 4.83$.

What inferences can you draw from this estimation?

A

A one unit change in $X$ is associated with a $5.10$ units change in $Y$, and this effect is statistically different from zero at a $95\%$ confidence level.

B

A one unit change in $X$ is associated with a $5.10$ units change in $Y$, and this effect is statistically different from zero at a $90\%$ confidence level.

C

The marginal effect is not different from zero at a reasonable statistical level and, therefore, one cannot conclude that there is any tangible relationship between $Y$ and $X$.

D

The marginal effect is not different from zero at a reasonable statistical level but it is at least possible to conclude that there is a positive relationship between $Y$ and $X$.

E

The marginal effect is not different from zero at a reasonable statistical level but it is at least possible to conclude that if the effect was statistically significant, the magnitude would be $5.10$.