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ECON 2100 problem set 10 solution
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Textbook questions

Chapter 9:  1, 3, 45, 70, 71, 76, 77. 


Statistical investigation

These questions again use data from a survey of Albers students conducted in Fall 2014, regarding their housing situation.  The data are found in the file “housing survey data fall 2014.” 


Nationwide, the average household size in 2010 was determined to be 2.58 people (www.census.gov).  You would like to conduct a hypothesis test at a 5% significance level to determine whether there is evidence that the household size for Albers students differs from the national average.


a. State the null and alternative hypothesis for the test.


b. Calculate the appropriate test statistic (t-stat) for the test.


c. What is the critical value for the test?


d. Do you reject, or not reject, the null hypothesis? Explain your decision based on the critical value.


e. Find the p-value for the hypothesis test (use Excel’s T.DIST.2T function).


f. Using the p-value, explain your decision regarding the null hypothesis (reject/not reject).


g. Summarize your conclusion in a sentence or two:  what does the test show about household size?  


Everyday statistics

Please read the article “When Whites Get a Free Pass,” linked here and posted along with the assignment. 


a.  Briefly describe the study:  what strategy was used to test for racial discrimination?


b.  The fourth paragraph of the article includes the sentence, “the study uncovered substantial, statistically significant race discrimination.”  What does ‘”statistically significant” mean here?


c.  In the sentence, “the study uncovered substantial, statistically significant race discrimination,” what evidence is provided to show that the racial discrimination was substantial (socially or economically significant)? 


d. This study is in the tradition of “audit testing,” in which randomized trials are used to test for discrimination.  What is particularly original about this “audit test”?   

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