Estimated regression HRSWK4158 001WAGE N9799 Estimated var

Estimated regression: HRSWK=41.58 + 0.01WAGE . N=9799.

Estimated variances/covariance of LS estimators:

( I understand part a, but I don\'t know the steps needed to calculate the p-value in part b )

a) Test the null hypothesis that the relationship has slope that is less than, or equal to, zero at the 5% level of significance. State the null and alternative hypotheses in terms of the model parameters. Using the results, do we confirm or refute the theory of labor supply?

b) Use Statistical Table 1 of normal probabilities to calculate an approximate p-value for the test in (a). Draw a sketch representing the p-value.

INTERCEPT WAGE INTERCEPT 0.02324 -0.00067 WAGE -0.00067 0.00003

Solution