“Union employees earn significantly higher wages and work significantly fewer ho
ID: 3236940 • Letter: #
Question
“Union employees earn significantly higher wages and work significantly fewer hours than non-union employees”.
This is widely believed about unionized employees—they earn more for doing less. Implied here is an association between union membership (the EV) and both hourly wages and hours worked per week (the RVs)
Complete the following steps to evaluate this claim.
A. State the null hypotheses and alternative hypotheses associated with this claim.
B. Identify the statistical tests (one for each EV/RV combination) that will allow you to test these hypotheses. Explain why you believe each statistical test is the appropriate choice.
Explanation / Answer
Part-A. To test whether union employees earn significantly higher wages, the null hypotheses
H0: 1=2
…..is to be tested against the alternative hypotheses
Ha: 1>2
Here 1 and 2 are the true mean wages of union and non-union employees respectively.
To test whether union employees work significantly fewer hours than non-union employees, the null hypotheses
H0: 1=2
…..is to be tested against the alternative hypotheses
Ha: 1<2
Here 1 and 2 are the true mean hours worked of union and non-union employees respectively.
Part-B
To test whether union employees earn significantly higher wages we will apply independent sample t-test with wages as Response variable RV and group(union/non-union) as exploratory variables EV. This is because there are two groups over which ratio scaled wages is to be compared.
To test whether union employees work significantly fewer hours than non-union employees, we will apply independent sample t-test with hours worked as Response variable RV and group(union/non-union) as exploratory variables EV. This is because there are two groups over which ratio scaled hours worked is to be compared.
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