t-test for significance of one coefficient
The t-test is used to determine whether the relationship between y and xj is significant.
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The null hypothesis is that the coefficient is not significantly different than zero.
The alternative hypothesis is that the coefficient is significantly different from zero.
We use the t-distribution:
o The test statistic t = coefficient /standard error
o The critical values are from the t distribution
o The test is a two-tailed test.