Confusing Power of T Test!

ORly

New Member
#1
Hey all,

This is my first post to this site. My question is:

I am using this (given) regression to find the relationship between gender and wage:

Lnwage = Beta0 + Beta1male + Beta2Professional + Beta3Management + Beta4Educ + u

My professor wants me to test the power of the test with null hypothesis that men at earn at least twice as much as women against alternative that men earn 80% more.

I set up:

Null Hypothesis: Beta 1 = 1
Alternative Hypothesis Beta 1 = .8

This was confirmed correct by my grad TA who is grading these. How would I set up a power test for this?? Standard Error = .1198

Thanks so much!!