NORMALITYTHE HYPOTHESES USED ARE

3. - ECONOMETRICS FINAL EXAM FACTORS AFFECTING QUANTITY OF NEW CARS SOLD FOREIGN TRADE UNIVERSITY STUDENTS 3. - ECONOMETRICS FINAL EXAM FACTORS AFFECTING QUANTITY OF NEW CARS SOLD FOREIGN TRADE UNIVERSITY STUDENTS
ECONOMETRICS FINAL EXAM FACTORS AFFECTING QUANTITY OF NEW CARS SOLD FOREIGN TRADE UNIVERSITY STUDENTS

3. Normality

The hypotheses used are:

: The sample data are not significantly different than normal.

: The sample data are significantly different than normal.

Figure 7.5: Normality test (Source: Gretl)

It can be seen from the figure 7.5 that:

p-value=0.6038>0.05

⇒With the common = 5% for the 2-tail test, we are able to give the conclusion to

accept the assumption H0

Conclusion: u

i

follows the normal distribution.

Analysis:

The normal distribution is a probability function that describes how the

values of a variable are distributed. The result of our test showed that the model has

a normal distribution, which means that the parameters of our model is significant.