Quant - F Stat understand, setting, values

meghanjackson

I understand that the F-test sets the independent variables, as a group, to explain the variabtion in the dependent variable But, what is the logic behind setting the values of the independent variables to zero (0)?

i.e. H0: b1 = b2 = b3 = b4 = 0

scarecrow

hi Rusbus,

when you say "If all of these coefficients together come out to be statistically 0..." what do you mean exactly?

the null is trying to prove that all the coefficients = 0. If they do, this means that the F-value will lie outside the critical F value?

Sportsman

gazhoo Wrote:
-------------------------------------------------------
> hi Rusbus,
>
> when you say "If all of these coefficients
> together come out to be statistically 0..." what
> do you mean exactly?
>
> the null is trying to prove that all the
> coefficients = 0. If they do, this means that the
> F-value will lie outside the critical F value?

F-test is a one sided test. Fstat is greater than or less than Fcrit = accept null hypothesis regression is insignificant.

NO EXCUSES

bingbingliang

aren/'t you supposed to reject the null if F-stat is greater or less than Fcritical?

random_walker47

You reject the null if the F stat is greater than the critical value determined from the F table. The null hypothesis is that the test parameters do NOT explain the model. Therefore if you reject the null, you are saying that the independant variables (as a group) do explain the dependant variable to some extent. If you fail to reject the null, it means that the independant variables do not explain the dependant one.