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If we find that the null hypothesis, Upper H Subscript 0 Baseline colon beta Subscript j Baseline equals 0, cannot be rejected when testing the contribution of an individual regressor variable to the model, we usually should:___________

Respuesta :

Answer:

Remove the variable from the Model

Step-by-step explanation:

Normally, when considering which variable to keep and which one to drop when considering testing of the contribution of an individual regressor variable to the model, generally speaking we use one explanatory variable for between 10-15 observations.

Now, before we run our regression, we would need to run correlation analysis between all explanatory variables to detect if there's any multicollinearity, and also between the dependent variable and the regressors in order to determine the most important predictors to be included in the regression.

So after the analysis, for the null hypothesis not to be rejected, we will remove the variable from the Model.

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