Suppose that you were told that average hourly wages in State A and State B are different. However, you have your own suspicion that it could be the same. You suggest to your brother, who is attending a school in State B to collect data on hourly wage as part of your project You do the same for State A as your school is located in State A. The accompanying table shows your and your brother's findings. Average Hourly Wages in State A and State B, in dollar State A State B Ystate A Sstate A Nstate A Ystate B Sstate B Nstate B 155 57.8 3.9 58.7 4.2 157 (p) significant at the 1% level? Which critical value did you use? Why would this number be Calculate the t-statistic for comparing the two means. Is the difference statistically smaller if you had assumed a one-sided alternative hypothesis? What is the intuition behind this? What about at 5% level? (e)

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Suppose that you were told that average hourly wages in State A and State B are different.
However, you have your own suspicion that it could be the same. You suggest to your brother,
who is attending a school in State B to collect data on hourly wage as part of your project
You do the same for State A as your school is located in State A. The
accompanying table shows your and your brother's findings.
Average Hourly Wages in State A and State B, in dollar
State A
State B
Ystate A Sstate A Nstate A Ystate B Sstate B Nstate B
57.8
3.9
155
58.7
4.2
157
(d)
Calculate the t-statistic for comparing the two means. Is the difference statistically
significant at the 1% level? Which critical value did you use? Why would this number be
smaller if you had assumed a one-sided alternative hypothesis? What is the intuition behind
this?
(e)
What about at 5% level?
Transcribed Image Text:Suppose that you were told that average hourly wages in State A and State B are different. However, you have your own suspicion that it could be the same. You suggest to your brother, who is attending a school in State B to collect data on hourly wage as part of your project You do the same for State A as your school is located in State A. The accompanying table shows your and your brother's findings. Average Hourly Wages in State A and State B, in dollar State A State B Ystate A Sstate A Nstate A Ystate B Sstate B Nstate B 57.8 3.9 155 58.7 4.2 157 (d) Calculate the t-statistic for comparing the two means. Is the difference statistically significant at the 1% level? Which critical value did you use? Why would this number be smaller if you had assumed a one-sided alternative hypothesis? What is the intuition behind this? (e) What about at 5% level?
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