If zero lies within the confid

If zero lies within the confidence interval of a coefficientestimate

The regressor is insignificant
The coefficient estimate is positive
The coefficient estimate is negative
The confidence level is not high enough


The correct option is

  • The regressor is insignificant.

The coefficient is the value associated with the independent orexplainatory variable, also known as regressor. Every estimatedcoefficient test includes the null that the coefficient is notsignificantly different from zero, ie , and the alternate that the coefficient is indeedsignificantly different from zero, ie . If confidence interval of the estimate includes zero, then we saythat we fail to reject the null hypothesis, that thecoefficient is not significantly different from zero, or that it isnot significant.

Besides, the coefficient estimate being positive or negative isirrelevant in that case, as the coefficient couldn’t be asignificant one. If the confidence interval is increased, then theinterval may include zero. Also, it would be wise to say in thiscase that the confidence level is not low enough. Hence,all the other options are not correct.

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