Given the regression results above

(3.31)

Using both the test of significance and confidence interval approaches, test the hypothesis that β = 1 against a two-sided alternative. This hypothesis might be of interest, for a unit coefficient on the explanatory variable implies a 1:1 relationship between movements in x and movements in y.

The null and alternative hypotheses are, respectively, The results of the test according to each approach are shown in box 3.7.