Statistics

Question 1

Steps for hypothesis testing a mean

Answer 1

1. State the hypothesis
2. Compute sample mean of Y
3. Compute sample standard error of Y
4. Compute t-statistic
5. Compute p-value
6. Specify significance level and use the rejection rule based on critical or p-value approach (reject if in the tail)

Question 2

Confidence intervals

Answer 2

The set of values that likely contains the true value of muY with some confidence level
e.g. there is a 95% chance that the true value of the mean sits between the lower and upper bound of the confidence interval

Question 3

Difference of two mean hypothesis tests

Example with earning

Answer 3

Do males and femals make the same earnings on average:
H0: muw-mum=do, H1: muw-mum=!do
*formulas are on the formula sheet