Question

Suppose that you are interested in estimating the average impact a job training program has on wages. After controlling for observed factors that influence wages, participation in the training program, you find that the coefficient for the training is 0.55 and the standard error is 1.06. Thus, we can infer that the training program has a positive and statistically significant impact on wages at a 95% confidence level.
a) true
b) false

Answer 1

Answer:

False

Step-by-step explanation:

From the question we are told that

The coefficient for the training is $r = 0.55$

The standard error is $SE = 1.06$

The confidence level is 95%

Generally the level of significant is mathematically represented as

$\alpha =( 100 -95)\%$

=> $\alpha = 0.05$

Generally the critical value of $\alpha = 0.05$ obtained from the normal distribution table is $Z_{0.05} = 1.645$

Generally the test statistics is mathematically represented as

$t = \frac{r }{SE}$

=> $t = \frac{0.55}{1.06}$

=> $t = 0.5189$

Generally given that the $t < Z_{\alpha }$

Hence  there is no sufficient evidence to conclude that the program has a positive and statistically significant impact on wages at a 95% confidence level.

So the answer is False