Chapter 6 - Hypothesis Testing and Confidence Intervals

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Lecture Slides:      Powerpoint     PDF

Learning Objectives

  • Test a hypothesis about a regression coefficient 
  • Form a confidence interval around a regression coefficient
  • Show how the central limit theorem allows econometricians to ignore assumption CR4 in large samples 
  • Present results from a regression model


  1. Central Limit Theorem in Action
  2. CA Schools

What We Learned

  • We reject the null hypothesis of zero relationship between free lunch eligibility (FLE) and academic performance. 
    • Our result is the same whether we drop CR4 and invoke the central limit theorem (valid in large samples) or whether we impose CR4 (necessary in small samples).
  • Confidence intervals are narrow when the sum of squared errors is small, the sample is large, or there’s a lot of variation in X.
  • How to present results from a regression model.