Discuss the below:
Q. In the 1980s, Tennessee conducted an experiment in which kindergarten students were randomly assigned to "regular" and "small" classes, and given standardized tests at the end of the year. ("Regular" classes contained approximately 24 students and "small" classes contained approximately 15 students.) Suppose that, in the population, the standardized tests have a mean score of 925 points and a standard deviation of 75 points. Let SmallClass denote a binary variable equal to 1 if the student is assigned to a small class and equal to zero otherwise. A regression of Testscore on SmallClass yeilds
Standard errors are below the coefficients in the parentheses.
a. Do small classes improve test scores? By how much? Is the effect large? Explain.
b. Is the estimated effect of class size on test scores statistically significant? Carry out a test at the 5% significance level.
c. Construct a 99% confidence interval for the effect of SmallClass on Testscore.
d. Do you think that the regression errors are plausibly homoskedastic? Explain.