Question

Open Wages-HW9 data. Test if people with 16 years of EDUCATION and people with 12 years of EDUCATION have wages that are significantly different on average. Answer questions 5 to 8.5. What test did you perform? (6.25 points)a. Simple Regressionb. Multiple Regressionc. Two sided t-testd. None of these

Answer 1

Correct option: (c). Two sided t-test.

Explanation:

A test is to be performed to determine whether the people with 16 years of education and 12 years of education have wages that are significantly different on average.

A sample is provided for the wages of people in both the category.

Compute the sample mean and sample standard deviations for both the sample using the formulas:

`\bar x=(1)/(n)\sum x\\s=\sqrt{(1)/(n-1)\sum (x_(i)-\bar x)^(2)}`

The hypothesis is:

H₀: The wages of the two groups is not different, i.e. μ₁ = μ₂.

Hₐ: The wages of the two groups is not different, i.e. μ₁ ≠ μ₂.

A test for the difference between two means is to be performed.

Since there is no information about the population standard deviations, use a t-test for the difference between two means.

Thus, the correct option is (c). Two sided t-test.