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Tina is trying to estimate the effect of the assets of a company on its profit, based on 1000 public companies in the UK.

 

Tina is trying to estimate the effect of the assets of a company on its profit, based on 1000 public companies in the UK. She constructed an econometric model in a log-log form and obtained the OLS estimate = 0.65 with a standard error of 0.176. Write down the model in a log-log form. a) b) c) Tina wants to test whether assets have a significant effect on profit. State the null and alternative hypotheses and calculate the t statistics with 5% significance level. Interpret the meaning of B.

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