Suppose you would like to test the hypothesis that one year of attending a university is worth three years of attending a two-year school (junior college), in terms of effect on wages, using the following econometric model:log(wage)=β0+β1jc+β2univ+β3ex per + uwhats the Null?

Explanation:

The null hypothesis is the hypothesis that there is no significant difference between specified populations and that any observed difference is due to sampling/experimental error.

We would like to test that one year of attending a university with regression parameter is worth 3 years of attending a junior college with regression parameter in terms of the wages earned.

In the model:

The null hypothesis will therefore be:

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