Test the hypothesis, Suppose you want to test the

Test the hypothesis

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Reference no: EM131173138

Suppose you want to test the hypothesis that higher income taxes make people work fewer hours per year on average. The tax rate is your independent variable and hours worked per year is your dependent variable and you want to use each individual country as an observation. Suppose you run your regression and find that people in countries with higher income taxes work more hours per year. What is a potential reason why that could happen? what is the problem in testing the original hypothesis in this way?

Reference no: EM131173138

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