Hypothesis Testing (Hypothesis Testing)

Using the nlsw88 data, this exercise asks you to apply the five-step hypothesis testing procedure from the Creating Theoretical Distributions lecture:

Test whether women work 40 hours per week on average. The variable hours records usual hours worked per week.

• Use sum to find the sample mean, standard deviation, and sample size.
• As a comment in your do-file, write down the hypotheses for testing whether women work 40 hours per week on average:
  • $H_0: \mu = 40$
  • $H_1: \mu \neq 40$

1. Use ttest to perform a one-sample t-test of this hypothesis.

1. What is the sample mean of hours?
2. What is the t-statistic?
3. How many degrees of freedom are there?
4. What is the two-sided p-value?
5. At the 5% significance level, do you reject or fail to reject the null hypothesis that women work 40 hours per week on average?

Now we will test a hypothesis about the mean hourly wage for college graduates only.

• Use tab with and without the nolab option to determine which numerical value college grade takes.
• Use sum with if to summarize the wages of just college graduates.
• Suppose someone claims that college graduates in this sample earn $10 per hour on average. Set up the hypotheses:
  • $H_0: \mu = 10$
  • $H_1: \mu \neq 10$

2. Use a one-sample t-test restricted to college graduates to test this claim.

1. What is the sample mean of hours?
2. What is the t-statistic?
3. How many degrees of freedom are there?
4. What is the two-sided p-value?
5. At the 5% significance level, what is your decision about $H_0$?

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