Hypothesis test memo no. 1


1. R2 is the coefficient of determination, which is the square of the Pearson correlation coefficient, r, the formula for which is ρ=β1(σx/σy), where β1 is the parameter estimate. ASCI and Unicode text does not have a circumflex, ^, on top of the β. For this documentation the objective is multiplatform long-term readability so an equation editor with specialized support for circumflexes is out of the question.

2. There is also the existence of the rejection region method. We reject the null hypothesis if the test statistic’s absolute value is greater than the critical value, which we can express with the formula Reject if |t| > tα/2,n-1