In the 1980s Tennessee conducted an experiment in which kind

In the 1980s, Tennessee conducted an experiment in which kindergarten students were randomly assigned to “regular” and “small” classes, and given standardized tests at the end of the year. (Regular classes contained approximately 24 students, and small classes contained approximately 15 students.) Suppose that, in the population, the standardized tests have a mean score of 925 points and a standard deviation of 75 points. Let SmallClass denote a binary variable equal to 1 if the student is assigned to a small class and equal to 0 otherwise. A regession of TestScore on SmallClass yields TSC = 918.0 + 13.9* SmallClass, R2 = 0.01, SER = 74.6 (1.6) (2.5)

a. Do you think that the regression errors plausibly are homoscedastic? Explain. (2 points)

b. SE(B1^) was computed using Equation (5.3). Suppose that the regression errors were homoscedastic. Would this affect the validity of the confidence interval constructed in Exercise 5.5c? Explain

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