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economics and statistics assessment

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10 views6 pages

ECMT

economics and statistics assessment

Uploaded by

joeymedxna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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University of Sydney SID

5 4 0 7 3 7 3 4 9

Data set #
9

ECMT1010 Assignment
Due: 11.59PM Friday 17 May 2024

1. Show how you arrive at the number of bins. Describe and compare the histograms (≤ 50
words).

Number
Of
Males

Hourly wage rate (males)

Number

Of

Females

Hourly wage rates (female)

By looking at the number of observations in the data set which n= (100), I was able to √𝑛, which meant
√100 = 10, so this meant I was able to determine that 10 bins were needed.

The two histograms show a skewness to the right, where the mean male wage rate is 6.721, whereas the
mean female wage rate was equal to 4.832. Further the male wage rate exhibited a higher frequency at
increased wage levels.
2. Produce a labelled plot. Report the correlation. Comment on the association (≤ 50 words).

Sample correlation (r) = 0.441

Years of education and wage rates show an adequate correlation that is positive, meaning that between the
two variables there is an adequate association. This means that on average the longer you have an education
the higher wage results you will achieve.

3. Show all steps in the list.

𝐻𝑜 : 𝜌=0 𝐻𝑎 : 𝜌0

Where ‘p’ is representing the correlation between years of education and wages.
0.441 √100−2
Test statistic→ = 4.864
√1−0.4412

The p-value equates to 0.0000044 or approximately rounded to three decimal places 0.00.

At the significance level of 5%, the p-value of 0.0000044 < 0.05, which means you would reject the null
hypothesis and accept the alternative hypothesis.

To conclude, the statistically significant evidence shown, shows there is in fact an association between the
wage rates and the years of education received.
4. Define your notation.

𝑦 = β𝑜 + β1 𝑥 + ∈

𝑦 = (response variable) = wage rate of the workers

β𝑜 = The Y-intercept

β1 = The explanatory variable→the regression line slope.

𝑥 = The years of education.

5. Report regression results using this table.

𝑦̂ = -0.974 + 0.530 𝑥

variable coefficient std error t-statistic


p-value
Intercept -0.974 1.456 -0.669 0.505
education 0.538 0.111 4.863 0.0000044
1
Regarding the slope estimate, for every 1 year of education received, the hourly wage rate increases by
0.538.

6. Show all steps in the list.

𝐻𝑜 : β1 = 0

𝐻𝑎 : β1  0

β1 , is equal to the workers hourly wage rate slope.


β 0.538
Test statistic = 𝑆𝐸1 = 0.111 = 4.847

The degrees of freedom= 100-2=98

The p-value = 0.0000024 x 2 = 0.0000048 due to being a two tailed test.

If p < 0.05, rejecting the null hypothesis is the best option. But if p>0.05 the best option is to not reject null
hypothesis.

Due to 0.0000048< 0.05, we can determine that that due to a 5% significance level the null hypothesis can be
rejected. This means the alternative hypothesis can be accepted. This means we have statistically significant
evidence to reveal that the hourly wage rate is determined by the number of years received in education.

7. Define notation and state hypotheses.

𝜇𝑀 = the average hourly male wage rate in 1978

𝜇𝐹 = The average hourly wage rate for females in 1978

𝐻𝑜 = 𝜇𝑀 - 𝜇𝐹 = 0

𝐻𝑎 = 𝜇𝑀 > 𝜇𝐹

8. Keep your comments brief (≤ 50 words).

The randomised distribution is precisely symmetrical, and bell shaped. The difference between the mean
female and male wage rates is centred at the mean sample of 1.886.
9. Show your steps, test results, and conclusion.

The population mean is estimated by the mean value by looking at question 8 (listed above) by looking at the
bootstrap dot plot which was 1.886. Using a cut off point for the randomised dot plot the p-value we get is
0.0012.

We reject the Null hypothesis as 0.0010 < 0.05.

Through using the Central limit theorem, we can reject the Null hypothesis due the p-value being 0.029,
which 0.030 < 0.05. This conducts that on average, the female hourly rate is less than the male hourly wage
rate.
10. Keep your answer brief (≤ 50 words).

By examining the central limit theorem along with the randomised distribution results, we can determine
that the alternate hypothesis is infact true, this means the hourly wage rate of women being lower than the
hourly wage rate of males in 1978. However, we are unable to determine whether it is correlation or
causality due as the study is an observational and not an experimental.

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